TY - JOUR AU - Hummels,David AU - Jørgensen,Rasmus AU - Munch,Jakob R. AU - Xiang,Chong TI - The Wage Effects of Offshoring: Evidence from Danish Matched Worker-Firm Data JF - National Bureau of Economic Research Working Paper Series VL - No. 17496 PY - 2011 Y2 - October 2011 UR - http://www.nber.org/papers/w17496 L1 - http://www.nber.org/papers/w17496.pdf N1 - Author contact info: David Hummels Krannert School of Management 403 West State Street Purdue University West Lafayette, IN 47907-1310 Tel: 765/494-4495 Fax: 765/494-9658 E-Mail: hummelsd@purdue.edu Rasmus Jorgensen Department of Economics University of Copenhagen Øster Farimagsgade 5 Building 26 DK-1353 Copenhagen K E-Mail: rasmus.jorgensen@econ.ku.dk Jakob Munch Department of Economics University of Copenhagen Øster Farimagsgade 5 Building 26 DK-1353 Copenhagen K E-Mail: Jakob.Roland.Munch@econ.ku.dk Chong Xiang Department of Economics Purdue University 403 West State Street West Lafayette, IN 47907-2506 Tel: 765/494-4499 Fax: 765/496-1778 E-Mail: cxiang@purdue.edu AB - We estimate how offshoring and exporting affect wages by skill type. Our data match the population of Danish workers to the universe of private-sector Danish firms, whose trade flows are broken down by product and origin and destination countries. Our data reveal new stylized facts about offshoring activities at the firm level, and allow us to both condition our identification on within-job-spell changes and construct instruments for offshoring and exporting that are time varying and uncorrelated with the wage setting of the firm. We find that within job spells, (1) offshoring tends to increase the high-skilled wage and decrease the low-skilled wage; (2) exporting tends to increase the wages of all skill types; (3) the net wage effect of trade varies substantially across workers of the same skill type; and (4) conditional on skill, the wage effect of offshoring exhibits additional variation depending on task characteristics. We then track the outcomes for workers after a job spell and find that those displaced from offshoring firms suffer greater earnings losses than other displaced workers, and that low-skilled workers suffer greater and more persistent earnings losses than high-skilled workers. ER -