Does offshoring affect industry employment? Evidence from a wide European panel of countries

Th is paper contributes to the literature on the possible impact of international outsourcing on domestic labour markets.We focus on off shoring-employment relationship.Th e analysis is performed for a wide European panel, composed of 27 EU countries and 13 manufacturing sectors, observed in the period 1995-2009.Th anks to the use of input-output tables from the WIOD project, we measure the intensity of off shoring in the sectors, as well as its decomposition into the domestic and foreign components.Th eoretical background for our analysis is rooted in recent trade-in-tasks models of international trade.Our empirical results, based on the estimation of panel data model, suggest that indeed domestic employment in EU manufacturing can be pushed down by increased off shoring.More specifi cally, low skill workers are the ones to be aff ected the most because of shrinking labour demand at home.