Offshoring, Outsourcing, and Production Relocation - Labor-Market Effects in the OECD Countries and Developing Asia

This paper evaluates data validity of available empirical sources and the extent of services sector labor market impact of offshoring in the US, EU-15 and Japan. A three-tier data validity hierarchy is identified, while the employment impact of offshoring in the three regions is found to be limited. Correspondingly, developing Asia is unlikely to experience large-scale employment gains as a destination region. Instead, the crucial role of domestic entrepreneurs in the growth of the Indian IT-related services industry is highlighted, as are the twin educational challenges facing developing Asia: the need to improve both primary and higher education simultaneously.