Offshoring and the Onshore Composition of Occupations, Tasks and Skills∗

Using plant data that distinguish between occupations, tasks, and workforce skills, this paper investigates the relationship between offshoring and the onshore workforce composition at German multinational enterprises (MNEs) in manufacturing and services. There is no statistically significant association between offshoring and the share of whiteand blue-collar jobs in the onshore wage bill. The proportion of non-routine and interactive tasks, however, increases with offshoring, especially at services MNEs. In excess of what is implied by changes in either the occupational or task composition, offshoring predicts an increase in the wage-bill share of workers with upper-secondary education. While this excess educational upgrading beyond occupational and task recomposition is statistically significant, the economic effect of offshoring on the wage-bill composition is estimated to be small. ∗We thank Costas Arkolakis, Beata Javorcek, Andres Rodriguez-Clare and Deborah Swenson for insightful comments. We thank Heinz Herrmann, Alexander Lipponer, Beatrix Stejskal-Passler, and Elisabetta Fiorentino for support with BuBa firm data, and Stefan Bender, Iris Koch and Stephan Heuke at BA for assistance with the plant records. Karin Herbst and Thomas Wenger kindly shared string-matching expertise, and Alexandra Spitz-Oener generously contributed task classifications for robustness checks. Ming Zeng provided excellent research assistance. We gratefully acknowledge financial support from the VolkswagenStiftung, the Fritz-Thyssen-Stiftung, the Wallander Foundation, the Swedish Council for Working Life and Social Research, and the Ifo Institute. ¶[email protected] (www.sobecker.de), corresponding. Ph: +49 (89) 2180-6252.