Outsourcing and low-skilled workers in the UK
Anderton, Bob and Brenton, Paul (1998) Outsourcing and low-skilled workers in the UK. Working Paper. Coventry: University of Warwick. Centre for the Study of Globalisation and Regionalisation. (Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation)).
WRAP_Anderton_wp1298.pdf - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
Official URL: http://www2.warwick.ac.uk/fac/soc/csgr/research/wo...
This paper investigates the impact of ‘outsourcing’ on the relative wages and employment of the low-skilled in the UK. In contrast to previous studies which proxy outsourcing by imports from all countries, we examine whether the source of imports is important. We disaggregate UK imports according to individual supplier countries and construct import penetration terms for different groups of countries - ie, distinguishing between imports from industrialized countries and imports from low-wage countries - for each 4-digit industry within the broader categories of textiles and non-electrical machinery. Our econometric results show that imports from low-wage countries have made a significant contribution to the decline in the relative wages and employment of the less-skilled in the UK, with no discernible effect resulting from imports originating from industrialised countries. The estimates suggest that rising imports from low-wage countries may account for about 40 per cent of the rise in the wage bill share of skilled workers, and approximately one-third of the increase in their employment share, in the UK textiles sector during the period 1970-1983. We also offer some limited evidence that the degree of outsourcing may differ across industries and that large currency appreciations may have a disproportionately large impact on the economic fortunes of the less-skilled, partly by creating an increased ‘threat’ of outsourcing.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Alternative Title:||Outsourcing and low-skilled workers in the United Kingdom|
|Subjects:||H Social Sciences > HD Industries. Land use. Labor|
|Divisions:||Faculty of Social Sciences > Centre for the Study of Globalisation and Regionalisation|
|Library of Congress Subject Headings (LCSH):||Contracting out -- Great Britain, Wage differentials -- Great Britain, Semiskilled labor -- Great Britain, Unskilled labor -- Great Britain|
|Series Name:||Working papers (University of Warwick. Centre for the Study of Globalisation and Regionalisation)|
|Publisher:||University of Warwick. Centre for the Study of Globalisation and Regionalisation|
|Place of Publication:||Coventry|
|Number of Pages:||28|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
|Funder:||European Commission (EC)|
|References:||Alic, J.A. and Harris, M.C. (1991), ‘Appendix: The NBER immigration, trade and labor markets data files’, in Borjas, G. and Freeman, R., Editors: Immigration, Trade and the Labour Market. Chicago: University of Chicago Press and NBER, pp. 407-420. Anderton, R. (1997), ‘UK trade performance and the role of product quality, innovation and hysteresis: some preliminary results’, National Institute discussion paper no. 102. Anderton, R. and Brenton, P. (1998a) ‘Trade With the NICs and Wage Inequality: Evidence from the UK and Germany’ in Brenton, P and Pelkmans, J (eds) Global Trade and European Workers, Macmillan, London Anderton, R and Brenton, P. (1998b) ‘Did outsourcing to low-wage countries hurt less-skilled workers in the UK?’, in Brenton, P and Pelkmans, J (eds) Global Trade and European Workers, Macmillan, London Berman, E., Bound, J. and Griliches, Z. (1993), ‘Changes in the demand for skilled labor within US manufacturing industries: evidence from the Annual Survey of Manufactures’, National Bureau of Economic Research Working Paper No. 4255. Berman, E., Bound, J. and Griliches, Z. (1994), ‘Changes in the demand for skilled labor within US manufacturing: evidence from the Annual Survey of Manufactures’, Quarterly Journal of Economics, Vol. CIX, Issue no. 2, May. Brenton, P (1998) ‘Rising Trade and Falling Wages: A Review of the Theory and the Empirics’, in Brenton, P and Pelkmans, J (eds) Global Trade and European Workers, Macmillan, London Brenton, P. and Winters, L.A. (1992), ‘Estimates of bilateral trade elasticities and their implications for the modelling of 1992’, Centre for Economic Policy Research, Discussion Paper No. 717. Feenstra, R.C. and Hanson, G.H. (1995), ‘Foreign investment, outsourcing and relative wages’, National Bureau of Economic Research Working Paper No. 5121. Feenstra, R.C. and Hanson, G.H. (1996), ‘Globalization, outsourcing and wage inequality’, American Economic Review, Papers and Proceedings, Vol. 86, No. 2, May, pp. 240-245. Gereffi, G. (1993), ‘The role of big buyers in global commodity chains: How US retail networks affect overseas production patterns’, in G. Gereffi and M. Korzeniewicz, editors: Commodity Chains and Global Capitalism. Westport CT: Praeger, pp.95-122. Haskel, J. (1996a), ‘The decline in unskilled employment in UK manufacturing’ Centre for Economic Policy Research, Discussion Paper No. 1356. Haskel, J. (1996b), ‘Small firms, contracting-out, computers and wage inequality: evidence from UK manufacturing’, Centre for Economic Policy Research, Discussion Paper No. 1490. Kraft, K. (1996), ‘Wage differentials between skilled and unskilled workers’, Weltwirtscaftliches Archiv. Machin, S., Ryan, A. and van Reenen, J. (1996), ‘Technology and changes in skill structure: evidence from a panel an international panel industries’, Centre for Economic Policy Research No. 1434. Magaziner, K. and Patinkin, M. (1989), ‘Fast heat: How Korea won the microwave war’, Harvard Business Review, January-February, 83-92. Nickell, S. (1996), ‘Unemployment and wages in Europe and North America’, The Labour Market Consequences of Technical and Structural Change Discussion Paper Series No.6 (sponsored by the Leverhulme Trust). O’Mahony, M., Wagner, K. and Paulsen, M. (1994), ‘Changing fortunes: an industry study of British and German productivity growth over three decades’, National Institute Report Series number 7. Slaughter, M. (1995), ‘Multinational corporations, outsourcing, and American wage divergence’, National Bureau of Economic Research Working Paper No. 5253. Waldinger, R.D. (1986), Through the Eye of the Needle, New York: New York University Press. Wood, A. (1994), North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World, Oxford University Press, Oxford. Yoffie, D.B. and Gomes-Casseres, B. (1994), International trade and Competition, New York: Mcgraw-Hill.|
Actions (login required)