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THE IMPACT OF INTERNATIONAL OUTSOURCING ON LABOUR MARKET DYNAMICS IN GERMANY
Article first published online: 10 DEC 2010
DOI: 10.1111/j.1467-9485.2010.00535.x
© 2011 The Authors. Scottish Journal of Political Economy © 2011 Scottish Economic Society
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How to Cite
Bachmann, R. and Braun, S. (2011), THE IMPACT OF INTERNATIONAL OUTSOURCING ON LABOUR MARKET DYNAMICS IN GERMANY. Scottish Journal of Political Economy, 58: 1–28. doi: 10.1111/j.1467-9485.2010.00535.x
Publication History
- Issue published online: 10 DEC 2010
- Article first published online: 10 DEC 2010
- Date of receipt of final manuscript: 6 February 2010
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ABSTRACT
Using an administrative data set containing daily information on individual workers' employment histories, we investigate how workers' labour market transitions are affected by international outsourcing. In order to do so, we estimate hazard rate models for match separations, as well as for worker flows from employment to another job, to unemployment, and to nonparticipation. Outsourcing has a positive but small impact on overall job stability in the manufacturing sector, and considerably increases job stability in the service sector. However, the effect of outsourcing varies strongly across skill levels and age groups, with negative effects for some workers. This is especially the case in the manufacturing sector, where the hazard of transiting to nonemployment rises with international outsourcing for medium-skilled and older workers.