TY  - JOUR
AU  - Liu,Runjuan
AU  - Trefler,Daniel
TI  - Much Ado About Nothing: American Jobs and the Rise of Service Outsourcing to China and India
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14061
PY  - 2008
Y2  - June 2008
UR  - http://www.nber.org/papers/w14061
L1  - http://www.nber.org/papers/w14061.pdf
N1  - Author contact info:
Runjuan Liu
Alberta School of Business
University of Alberta
Edmonton AB
T6G 2R6
Canada
Tel: 7804920334
Fax: 7804923325
E-Mail: runjuan.liu@ualberta.ca

Daniel Trefler
Rotman School of Management
University of Toronto
105 St. George Street
Toronto, ON M5S 3E6
CANADA
Tel: 416/946-7945
Fax: 416/978-5433
E-Mail: dtrefler@rotman.utoronto.ca
AB  - We examine the impact on U.S. labor markets of offshore outsourcing in services to China and India.  We also consider the reverse flow or 'inshoring' which is the sale of services produced in the United States to unaffiliated buyers in China and India.  Using March-to-March matched CPS data for 1996-2006 we examine the impacts on (1) occupation and industry switching, (2) weeks spent unemployed as a share of weeks in the labor force, and (3) earnings.  We precisely estimate small positive effects of inshoring and smaller negative effects of offshore outsourcing.  The net effect is positive.  

To illustrate how small the effects are, suppose that over the next nine years all of inshoring and offshore outsourcing grew at rates experienced during 1996-2005 in business, professional and technical services i.e., in segments where China and India have been particularly strong.  Then workers in occupations that are exposed to inshoring and offshore outsourcing (1) would switch 4-digit occupations 2 percent less often, (2) would spend 0.1 percent less time unemployed, and (3) would earn 1.5 percent more.  These are not annual changes – they are changes over nine years – and are thus best described as small positive effects.
ER  -