The effects of offshoring on wages: a meta-analysis

Cardoso, Matilde; Neves, Pedro Cunha; Afonso, Óscar; Sochirca, Elena

doi:10.1007/s10290-020-00385-z

Cited by 22 publications

(20 citation statements)

References 80 publications

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“…The actual changes due to the main factors of interest are presented in the Table S17 in supplementary materials. The response of wages remains economically modest, confirming empirical findings of Cardoso et al (2021), among others, in this combined wages-employment model. The most noticeable impact of GVC is found for employment; around 5.15% growth in employment in high-income countries is due to forward participation, while a 3.75% drop in middle-income countries is due to backward participation.…”

Section: The Results and Interpretationsupporting

confidence: 87%

“…Yet, these fears have not materialised. For instance, Wolszczak-Derlacz and Parteka (2018) find that the downward pressure on domestic wages due to offshoring to low-wage countries is quite modest, as confirmed in the meta-analysis by Cardoso et al (2021).…”

Section: The Results and Interpretationmentioning

confidence: 81%

“…These studies corroborate the trade-in-tasks (Grossman & Rossi-Hansberg, 2008) and 'offshorability' (Blinder, 2009) theories. Finally, Cardoso et al (2021) perform a meta-analysis of empirical studies on offshoring and wages. After surveying 30 studies, the average effect is not significantly different from zero in either the origin or destination countries.…”

Section: The Empirical Literature and Research Problemsmentioning

confidence: 99%

“…The former is usually emphasised more heavily in offshoring studies (see, e.g. Cardoso et al, 2021;Hummels et al, 2018). But domestic production can be linked with foreign markets through forward linkages as well (production embodied in exports of final or intermediate products).…”

Section: Introductionmentioning

confidence: 99%

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Global value chains and labour markets – simultaneous analysis of wages and employment

Szymczak

Wolszczak‐Derlacz

2021

Economic Systems Research

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This study examines the overall effect of global value chains (GVCs) on wages and labour demand. It exploits the World Input-Output Database to measure GVC involvement via recently developed participation indices (using both backward and forward linkages) and the relative GVC position using three-stage least squares regression. We find that the relative GVC position is negatively correlated with wages and employment and that the GVC participation effect depends on whether backward or forward linkages are considered. Moreover, we find heterogeneity across both countries (middle-vs high-income) and sectors (manufacturing versus services). Notably, the effect of GVC involvement on the labour market differs from that produced by traditional domestic trade.

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Section: The Results and Interpretationsupporting

confidence: 87%

Section: The Results and Interpretationmentioning

confidence: 81%

Section: The Empirical Literature and Research Problemsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Global value chains and labour markets – simultaneous analysis of wages and employment

Szymczak

Wolszczak‐Derlacz

2021

Economic Systems Research

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“…Although changing exchange rates and fallible data make comparisons hard, it has been shown that relative unit labor costs (constructed from available compensation, employment, and value added data) have risen in China between 1998 and 2012, although remaining far lower than in the United States (Ceglowski and Golub, 2012). However, much of this rise has been due to the appreciating value of the yuan; indeed a metaanalysis of the impact of offshoring on wages shows the average effect to be negligible in both the originating and destination countries (Cardoso et al, 2020). Within this period, there has been a fundamental shift in living standards within China; in 2000, only 4% of urban households in China was middle class, increasing to 68% in 2012, and this has been forecast to reach 76% in 2022 (Barton, 2013).…”

Section: The Role Of Offshoring On Developmentmentioning

confidence: 99%

Onshoring Through Automation; Perpetuating Inequality?

Studley

2021

Front. Robot. AI

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Many analyses of the ethical, legal and societal impacts of robotics are focussed on Europe and the United States. In this article I discuss the impacts of robotics on developing nations in a connected world, and make the case that international equity demands that we extend the scope of our discussions around these impacts. Offshoring has been instrumental in the economic development of a series of nations. As technology advances and wage share increases, less labour is required to achieve the same task, and more job functions move to new areas with lower labour costs. This cascade results in a ladder of economic betterment that is footed in a succession of countries, and has improved standards of living and human flourishing. The recent international crisis precipitated by COVID-19 has underlined the vulnerability of many industries to disruptions in global supply chains. As a response to this, “onshoring” of functions which had been moved to other nations decreases risk, but would increase labour costs if it were not for automation. Robotics, by facilitating onshoring, risks pulling up the ladder, and suppressing the drivers for economic development. The roots of the economic disparities that motivate these international shifts lie in many cases in colonialism and its effects on colonised societies. As we discuss the colonial legacy, and being mindful of the justifications and rationale for distributive justice, we should consider how robotics impacts international development.

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