Labor market effects of international outsourcing: How measurement matters

As regards labor market effects of International Outsourcing, empirical results differ strongly. This is not only due to different data, the use of different indices adds to the puzzle. This paper investigates the importance of measurement differences for analyzing labor market effects of International Outsourcing. To this end, several indices are compared with respect to their design, their descriptive properties, their quality in proxying International Outsourcing activities, and their econometrical performance. As the results show, International Outsourcing effects depend strongly on measurement differences and the level of industry aggregation. Considering these results, different empirical findings can be reconciled. (C) 2008 Elsevier Inc. All rights reserved.