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Offshoring and Working Hours Adjustments in a Within-firm Labor Market

Endoh, Masahiro

Although a growing body of literature identifies the within-firm redistribution effects of trade, research on the adjustment processes in within-firm labor markets is scarce. This study analyzes the within-firm adjustment of working hours and wages by considering workers’ educational background and gender in response to a change in offshoring. Matched worker–firm panel data in the Japanese manufacturing sector covering 1998 to 2013 are being used. The analysis leads to the following observations: First, offshoring does not significantly change monthly and annual incomes. Second, offshoring decreases working hours—that is, imported inputs are close substitutes for labor inputs. More than three-quarters of the decrease in scheduled working hours can be attributed to a decrease in working days. Third, hourly wages increase in all worker groups examined. Though the impacts of offshoring on hourly wages and incomes are contradictory, both share the same feature: offshoring expands neither skill premium nor gender gap.

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More About This Work

Academic Units
Center on Japanese Economy and Business
Publisher
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Series
Center on Japanese Economy and Business Working Papers, 371
Published Here
November 25, 2019