SavedAdd your journal

Journals / Central Bank Review / 2008 / Cilt: 8 - Sayı: 1

Offshoring of service jobs

Ufuk DEMİROĞLU
Pages
17–64
DOI
—
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Service offshoring is currently a minor part of the overall international economic competition that the United States faces.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:Many previously-nontraded services have become tradable, or are expected to become so, as a result of technological advances in information technology.
📊
Key Findings & Data:While offshoring might become much more significant in the future, a closer look at occupation details reveals that most U.S. service jobs are not suitable for performing remotely from abroad, even when some significant cultural and institutional barriers are ignored.
💡
Conclusion & Impact:Service offshoring is currently a minor part of the overall international economic competition that the United States faces.
🔬Design:Review & Systematic Survey
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters

Abstract

Many previously-nontraded services have become tradable, or are expected to become so, as a result of technological advances in information technology. This situation has raised concerns about the future of jobs and workers' incomes in advanced countries, especially in the United States. However, a review of the U.S. evidence shows that the current extent of service offshoring is very modest in the United States, not only as a share of GDP but also in terms of its contribution to worker displacements. Service offshoring is currently a minor part of the overall international economic competition that the United States faces. Service offshoring appears to have been relatively intense for IT occupations, but the employment and wage trends in those occupations still compare favorably to U.S. averages. While offshoring might become much more significant in the future, a closer look at occupation details reveals that most U.S. service jobs are not suitable for performing remotely from abroad, even when some significant cultural and institutional barriers are ignored. In addition, a range of transaction and adjustment costs slow offshoring growth, and it would take a long time, possibly decades, for offshoring to attain its potential limits, although the available estimates of those limits and when they would be reached are very uncertain. This paper's assessment is that the share of existing jobs in the United States that have the possibility of exposure to competition from service offshoring is limited to 10 to 20 percent, and the impact will be sufficiently gradual to blend in with the ongoing ordinary structural changes in the U.S. economy.

🔖

Cite This Article

DEMİROĞLU, U. (2008). Offshoring of service jobs. Central Bank Review, Cilt: 8 - Sayı: 1, 17–64. https://ajindex.com/articles/151036

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (9)

  1. Amiti, M. and S. Wei (2004) “Fear of Service Outsourcing: Is It Justified?” IMF Working paper 04/186. Amiti, M. and S. Wei 2005, “Service Offshoring, Productivity, and Employment: Evidence from the United States,” IMF Working paper 05/238. Atkinson, R.D. (2006) “Apocalypse Soon? Why Alan Blinder Gets it Wrong on Offshoring,” July 6, 2006, commentary by the Information Technology and Innovation Foundation. Baily, M.N. and R.Z. Lawrence (2004) “What Happened to the Great U.S. Job Machine? The Role of Trade and Electronic Offshoring,” Brookings Papers on Economic Activity, v.0, iss. 2, pp. 211-70.
  2. Bartel, A., S. Lach and N. Sicherman (2005) “Outsourcing and Technological Change,” NBER Working Paper No. 11158. Bardhan, A. and C. Kroll (2003) “The New Wave of Outsourcing,” Fisher Center Research Report No. 1103, University California, Berkeley. Bednarzik, R.W. (2005) “Restructuring Information Technology: Is Offshoring A Concern?”, Monthly Labor Review, August, 11-21.
  3. Bernanke, B. (2004) “Trade and Jobs”, Federal Reserve Speech dated March 30, 2004.
  4. Bhagwati, J., A. Panagariya and T. N. Srinivasan (2004) “The Muddles over Outsourcing,” Journal of Economic Perspectives, Volume 18, Number 4, Fall 2004, pp. 93-114.
  5. Blinder, A. (2006) “Offshoring: The Next Industrial Revolution,” Foreign Affairs, Mar/Apr, Vol. 85, Iss.2, pg113. Borga, M. (2005) “Trends in Employment at U.S. Multinational Companies: Evidence from Firm-Level Data,” Brookings Trade Forum 2005.
  6. Bronfenbrenner, K. and S. Luce (2004) “The Changing Nature of Corporate Global Restructuring: the Impact of Production Shifts on Jobs in the Us, China, and Around the Globe,” a report commisioned by the U.S.-China Economic and Security Review Commission. Brown, S.P. and J. Siegel (2005) “Mass Layoff Statistics Data in the United States, and Domestic and Overseas Relocation,” Monthly Labor Review, August 2005, 1-10.
  7. Business Week (2006) “The Future of Outsourcing,” January 30. Davis, S., J. Haltiwanger, and S. Schuh (1996) Job Creation and Destruction Cambridge, Mass.: MIT Press.
  8. Deardorff, A.V. “A Trade Theorist’s take on skilled-labor outsourcing,” Research Seminar in International Economics, Discussion Paper No. 513, University of Michigan. Department of Commerce (2003) “Technical Appendix to Chapter II” in Digital Economy 2003.
  9. Forrester Research Inc. (2004) “Near-Term Growth of Offshoring Accelerating: Resizing U.S. Services Jobs Going Offshore,” Cambridge, Massachusetts. The Economist (2004) “A World of Wor