or “personal” services to describe
tasks requiring customer contact or
physical presence and “impersonal”
services to describe tasks requiring neither of these characteristics.
Higher values on this scale indicate
workers in these jobs provide fewer
personally delivered services, or “
impersonal” jobs, and are therefore
more likely to be offshored, all else
being equal.
We also included additional variables in our regressions to control
for other factors that might affect
an employee’s chances of being displaced due to offshoring. Since the
relative benefit of offshoring a particular worker depends on the cost of
the worker to the firm, we included a
measure of employee salary (coded
in discrete levels). Employees are less
likely to be displaced if they have more
firm-specific knowledge or experience
with the firm. Though we did not have
access to organizational tenure variables, we included the individual’s
job level, coded in discrete levels. We
included demographic variables for
employees, as there is evidence that
such factors as race, age, and gender
influence displacement; see Kletzer12
for a review of the job-displacement
literature. We also included the number of employees at the firm to control
for firm size, as well as a dummy variable indicating the industry in which
the firm competes. Finally, in some regressions, we also included the state
within the U.S. in which the firm operated in 2007, to control for regional
differences.
The figure here shows that offshoring
rates vary significantly by job type.
Over 30% of respondents reported off-
shoring computer programmers and
software developers, but only about
half of them, or 15.5%, reported off-
shoring systems analysts. About 24%
of employers offshore customer ser-
vice, and a smaller percentage (less
than 10%) offshore management,
sales, and marketing functions. A
test of the hypothesis that employers
offshore IT workers more than other
types of workers is significant at the
.01 level (X2( 1)= 86. 6). Among IT work-
ers, the hypothesis that computer
programmers and software develop-
ers are offshored in greater numbers
than systems analysts is significant at
the p<.01 level (X2( 1)= 30. 9).
table 1. Percent of surveyed firms by industry reporting offshoring work.
Results
Here, we present some statistics and
results from the regression analyses
aiming to identify the factors that
most affect offshoring:
Employer statistics. Table 1 reports
the overall incidence of offshoring
by industry in 2007. The proportion
of firms that reported offshoring any
type of work across all industries was
15.2%. However, within technology-services and telecommunications industries, over 40% of firms in the sample reported offshoring some type of
work. The hypothesis that offshoring
is more common in high-tech industries than in other industries is significant at the p<.01 level (X2( 1)= 100. 5).
industry
Technology services
Telecommunications
Insurance
Manufacturing
engineering services
banking and finance
Oil
Travel
utilities
communications
Advertising/Marketing
research services
Transportation and warehousing
Administrative-support services
Automotive services
Wholesale trade
Arts, entertainment, recreation
Agricultural/Forestry/Fishing/Hunting
Printing trade
Other
retail trade
construction
Other services
Waste Management
and remediation Services
Legal services
Accommodation and Food services
Health care and Social Assistance
real estate
religious/nonprofit
education
Gas
Mining
total
N
offshore to
third Party
offshore to
foreign affiliate
total
offshore
42. 1
41. 9
32. 3
31. 1
28. 1
24. 4
22. 2
21. 2
20. 7
20. 6
17. 1
17. 1
16. 2
16. 1
15. 6
15. 2
13. 1
12.0
11. 5
11. 2
11. 2
9. 3
9. 1
12
52
125
381
49
139
123
13
4
3,016
8. 3
5. 8
4
5. 2
4. 1
2. 9
3. 3
0
0
13. 1
0
0
2. 4
0.8
0
2. 2
0.8
0
0
7.0
8. 3
5. 8
5. 6
5. 5
4. 1
3. 6
3. 3
0.0
0.0