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Offshoring within South African manufacturing firms: An analysis of the labour market effects
Author(s) -
Pretorius Anmar,
Bezuidenhout Carli,
Matthee Marianne,
Blaauw Derick
Publication year - 2022
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/saje.12315
Subject(s) - offshoring , labour economics , earnings , manufacturing sector , capital intensity , economics , manufacturing , momentum (technical analysis) , capital (architecture) , business , human capital , outsourcing , market economy , accounting , marketing , finance , archaeology , history
Abstract South Africa's manufacturing sector experiences declining growth and labour demand, and increased imports of intermediate goods. The paper investigates the influence of offshoring on employment and wages for capital‐ and labour‐intensive industries and skilled and unskilled workers, using firm‐ and employer–employee‐level data. Unlike findings in developed countries, offshoring generally lowers employment in manufacturing firms and increases and decreases the percentage of unskilled workers and lower skilled workers, respectively. Increased narrow offshoring seemingly grows the cohort of unskilled workers, particularly in ultra‐labour‐intensive industries. As offshoring gains momentum, worker‐level earnings increase in capital‐ and labour‐intensive industries but decrease in ultra‐labour‐intensive industries.