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Research Institute of Industrial Economics (IFN) Working Paper Series

No 654:
The Effect of Offshoring on Labor Demand: Evidence from Sweden

Karolina Ekholm and Katariina Hakkala ()

Abstract: We analyze the effects of offshoring of intermediate input production on labor demand in Sweden, distinguishing between workers with different educational attainments. The econometric results using data for the 1995-2000 period indicate that offshoring -- in particular to low-income countries -- tends to shift labor demand away from workers with an intermediate level of education. Offshoring to high-income countries, which is the largest component of overall offshoring, does not have any statistically significant effect on the composition of labor demand.

Keywords: Offshoring; Labor Demand; Translog Cost Function; Factor-Biased Technological Change; (follow links to similar papers)

JEL-Codes: F16; (follow links to similar papers)

40 pages, December 8, 2005

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