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Outsourcing, Occupational Restructuring, and Employee Well-Being: Is There a Silver Lining?

Authors
Publisher
IZA Bonn
Publication Date
Keywords
  • J28
  • F23
  • Ddc:330
  • Globalization
  • Outsourcing
  • Offshoring
  • Downsizing
  • Working Conditions
  • Subjective Well-Being
  • Job Satisfaction

Abstract

This paper examines the relationship between outsourcing and various aspects of employee well-being by devoting special attention to the role of occupational restructuring as a conveying mechanism. Using linked employer-employee data, we find that offshoring involves job destruction, especially when the destination is a low-wage country. In such circumstances, staying employees' job satisfaction is reduced. However, the relationship between outsourcing and employee well-being is not entirely negative. Our evidence also shows that offshoring to high-wage countries stimulates the vertical mobility of employees in affected firms in a manner that improves perceived well-being, particularly in terms of better prospects for promotion.

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