Whose Job Goes Abroad? International Outsourcing and Individual Job Separations

This paper focuses on the adjustment costs of globalisation by studying the effects of international outsourcing on individual transitions out of jobs in the Danish manufacturing sector for the period 1990-2003. A competing risks duration model that distinguishes between job-to-job and job-to-unemployment transitions is estimated. Outsourcing is found to increase the unemployment risk of low-skilled workers, but the quantitative impact is modest. Outsourcing is also found to reduce the job change hazard rate for all education groups. Thus, the paper provides evidence for small adjustment costs of globalisation.