Impacts of service outsourcing on employment in china from the perspective of recipient country

This paper explains the impacts of international service outsourcing on employment in China from the perspective of recipient country based on the theoretical analysis of effects of outsourcing on labor demand. Both a fundamental model of labor demand and augmented model after the introduction of outsourcing are established,using nine industrial panel-data over the period of 2004- 2011. Results showed that wages,human capital,RD expenditure and service outsourcing have significantly positive impacts on employment in China with rather minor magnitude of RD,while labor productivity exerts a negative effect. Besides,unlike manufacturing outsourcing,service outsourcing mainly plays an employment-creating role in China.