Research Paper 07/42
Do Labour Market Institutions Matter? Micro-level Wage Effects of International Outsourcing in Three European Countries
Ingo Geishecker, Holger Görg and Jakob Roland Munch
Summary
We use individual level data sets for the UK, Denmark and Germany, and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing to Central and Eastern Europe from other countries. Estimating the same specification for the three countries to provide comparable results shows that there are some interesting differences in the effect of international outsourcing on wages across countries.
Abstract
This paper studies the impact of outsourcing on individual wages in three European countries with markedly different labour market institutions: Germany, the UK and Denmark. To do so we use individual level data sets for the three countries and construct comparable measures of outsourcing at the industry level, distinguishing outsourcing by broad region. Estimating the same specification on different data shows that there are some interesting differences in the effect of outsourcing across countries. We discuss some possible reasons for these differences based on labour market institutions.
Issued in December 2007
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