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The Effects of Offshoring on U.S. Workers: A Review of the Literature

Author(s)

Andre Barbe, David Riker


Abstract

Recent economic literature views offshoring through the lens of a “trade in tasks” framework. Sources have used this framework to examine four main issues related to offshoring: (1) the relative price, productivity, and net effect of offshoring; (2) the different effects of offshoring for high- and low-skilled workers; (3) the different types of offshoring; and (4) the relative importance of offshoring and technological change. Studies tend to find that low-skill workers are harmed by offshoring, while high-skill workers benefit. Similarly, different types of offshoring have either positive or negative impacts on employment in the home country. As a result of this heterogeneity, when discussing offshoring, economists should be clear about the effects and type of offshoring which they are discussing.