Statistics to Measure Offshoring and its Impact

Robert C. Feenstra

NBER Working Paper No. 23067
Issued in January 2017
NBER Program(s):International Trade and Investment

We identify “first generation” statistics to measure offshoring as the share of imported intermediate inputs in costs, along with O*NET data to measure the tradability of tasks. These data were used to measure the shifts in relative labor demand and relative wages due to offshoring. A limitation of these statistics is that they cannot be used to measure the impact on real wages, and for that purpose, we need price-based measures of offshoring. More recently, “second generation” statistics have arisen from global input-output tables. These measures include the foreign value-added in exports, or its counterpart, the domestic value-added in exports. We illustrate the foreign value-added component in the surge of Chinese exports following its WTO entry in 2001. We argue that such second-generation statistics should also be supplemented by price-based measure of offshoring, and we propose one simple measure that extends the effective rate of protection on imports to apply to exported goods.

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Document Object Identifier (DOI): 10.3386/w23067

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