Employment, job turnover, and trade in producer services: UK firm-level evidence

Employment, job turnover, and trade in producer services: UK firm-level evidence

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Article ID: iaor201111979
Volume: 44
Issue: 3
Start Page Number: 1020
End Page Number: 1043
Publication Date: Aug 2011
Journal: Canadian Journal of Economics/Revue canadienne d'conomique
Authors: , , ,
Keywords: statistics: regression
Abstract:

We provide the first firm‐level evidence of the impact of the trade in producer services (‘offshoring’) on the labour market. Using a new data set from the UK that measures trade in services at the firm level, we find no evidence that importing intermediate services is associated with job losses or greater worker turnover. Using regression to control for observable differences between firms that import service inputs and those that do not, we show that firms that start importing intermediate services experience faster employment growth than equivalent firms that do not. This seems likely to be the result of positive demand shocks, which cause a simultaneous increase in employment, output, and use of imported service inputs.

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