Services offshoring increases wage inequality

Authors

• Geishecker
• I.
• Görg
• H.
• Krieger-Boden
• C.

Publication Date

JEL Classification

Key Words

The effects of offshoring on wages remain a hotly debated issue. This column explores the case of UK firms between 1992 and 2004, recognising that offshoring in one particular industry may also affect labour demand in other industries. It suggests that services and materials offshoring increase the wages of high-skilled workers and decreases the wages of low- and medium-skilled workers, thus contributing to a rising wage inequality.

Kiel Institute Expert