2014年-CEPS欧洲政策研究中心_Outsourcing_and_Inequality_27页_334kb

Summary of "Outsourcing and Inequality"

Core Content

This paper explores the impact of outsourcing and technology on labour market inequality, particularly focusing on the relative wages and employment of skilled and unskilled workers in industrialised countries such as the UK, USA, Sweden, and Italy. It challenges the conventional view that trade has only a minor role in wage inequality and instead presents evidence that trade, especially imports from low-wage countries, has played a significant role in the decline of wage-bill share and employment of less-skilled workers.

The paper argues that outsourcing—the process of moving low-skill-intensive production activities to low-wage countries—is a key mechanism through which trade affects inequality. This is supported by empirical analyses using highly detailed trade and industry data, which allow for disaggregated identification of low-wage imports and their impact on within-sector inequality.

Main Viewpoints

• Outsourcing has been a major driver of the decline in wages and employment of unskilled workers in industrialised countries.
• Trade-induced outsourcing is more impactful than technology-induced changes in explaining inequality.
• Disaggregated trade data are essential for accurately measuring the impact of outsourcing on inequality.
• Technology also contributes to inequality, but trade-induced technological change (such as defensive innovation) may be a significant factor.
• Switching costs and exchange rate fluctuations can influence the rate and extent of outsourcing, leading to uneven changes in the economic conditions of unskilled workers.

Key Information

1. Outsourcing and Inequality

• Outsourcing involves moving low-skill production to low-wage countries to reduce costs.
• This process shifts demand from unskilled to skilled workers within industries.
• Empirical evidence shows that imports from low-wage countries have significantly reduced the wage-bill share and employment of unskilled workers in the UK, USA, Sweden, and Italy.
• Country-specific differences in labour market flexibility and outsourcing patterns lead to different inequality outcomes.

2. Measurement Issues

• Import penetration is used as a proxy for outsourcing, but it is important to distinguish between imports from low-wage and high-wage countries.
• Volume-based import measures are more accurate than value-based ones, as they avoid distortions from price changes and quality improvements.
• Switching costs and real exchange rate changes can lead to non-linear or lumpy effects on outsourcing and, consequently, on inequality.

3. Methodology

• The authors use panel data and econometric models to estimate the impact of outsourcing and technology on wage-bill and employment shares.
• The cost minimisation framework is central to the analysis, with equations that incorporate:
  • Output (Y)
  • Capital (K)
  • Relative wage rates (RW)
  • Technology (R&D, Patents)
  • Import penetration from low-wage countries (MPV, MPQ)
  • Variance of import prices (NSDIP)

4. Empirical Results

• In the UK, imports from low-wage countries significantly reduced the wage-bill share of unskilled workers.
• In the USA, low-wage imports had a positive impact on the wage-bill share of high-skill workers, suggesting a shift in demand.
• In Sweden, import penetration (in volume terms) was positively correlated with high-skill employment shares.
• In Italy, low-wage import penetration also had a positive effect on high-skill employment.

5. Policy Implications

• The authors suggest that trade-induced outsourcing has had a substantial impact on within-sector wage and employment distribution.
• They argue that intervention to curtail trade is not an appropriate response to inequality.
• Technology and outsourcing are both important, but trade appears to be the more significant driver of inequality in the manufacturing sector of these countries.

Conclusion

The paper concludes that outsourcing—driven by low-wage imports and technological change—has played a major role in increasing inequality in industrialised countries. The use of disaggregated data and detailed econometric models allows for a more accurate assessment of the impact of trade on labour market outcomes. It also highlights the importance of considering country-specific factors in understanding the dynamics of outsourcing and inequality.