published in: Economic Journal, 2005, 115 (506), 860-878
This paper investigates empirically the link between international outsourcing and the skill
structure of labour demand in the United Kingdom. It is the first detailed study of this issue for
the UK. Outsourcing is calculated using import-use matrices of input-output tables for
manufacturing industries for the period 1982 to 1996. Estimating a system of variable factor
demands, our main results show that international outsourcing has had a strong negative
impact on the demand for unskilled labour. Hence, international outsourcing is an important
component in explanations of the changing skill structure of manufacturing industries in the
United Kingdom.
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