How do firms who offshore change their local workforce? According to this article at VoxEU.org offshoring is one of the reasons that firms, in Germany at least, employ more highly educated workers at home. In the article Sascha O. Becker, Karolina Ekholm and Marc Muendler say
This column, using evidence from German multinationals, shows a positive correlation between offshoring and the firm’s proportion of highly educated workers. Offshoring firms have relatively more domestic jobs involving non-routine and interactive tasks. But offshoring is far from the only explanation for the shift towards more educated employees carrying out more advanced tasks.The articles authors argue there are two important lessons from their work,
- First, at the level of the individual firm, offshoring seems to be associated with a shift towards more educated workers. We also report a positive correlation between the increase in offshoring and the proportion of highly educated workers in the firm. Both these results suggest that offshoring is associated with an increased relative demand for more educated workers, as traditional theories would predict.
- Second, our results support the view that the degree to which jobs involve non-routine and interactive tasks is relevant for their propensity to be offshored.