Discussion Paper
No. 2019-68 | 2019.11.22
Santiago Budría and Juliette Milgram Baleix
Offshoring, job satisfaction and job insecurity
(Published in Recent developments in international economics)


This paper investigates the effects of offshoring on individual job satisfaction and perceived risk of job loss. The authors merge microdata from the German Socio‐economic Panel dataset (SOEP) with indicators of insertion in global value chains at the industry level for the period 2000‐2013. They test two hypotheses. First, they investigate whether workers in industries with higher offshoring intensity report lower job satisfaction and/or are more prone to be unsecure at their jobs. Second, they test whether these effects differ among four categories of collars. Their findings indicate that offshoring is associated with lower job satisfaction. Specifically, the reference individual would need a compensation of about 0.25% of her labour income to experience a 1% increase in offshoring intensity in order to maintain her job satisfaction constant. The results are also indicative of some heterogeneity in the offshoring effect, with high skilled white‐collar worker being mostly unaffected by offshoring and low skilled blue‐collar workers showing the largest negative effects. Moreover, the authors find that offshoring is not significantly related with job insecurity, a result that applies to all workers’ categories.

JEL Classification:

I31, F6

Cite As

[Please cite the corresponding journal article] Santiago Budría and Juliette Milgram Baleix (2019). Offshoring, job satisfaction and job insecurity. Economics Discussion Papers, No 2019-68, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2019-68

Comments and Questions

Anonymous - Referee Report 1
December 10, 2019 - 11:11
I think that this is an interesting paper and properly motivated and implemented. However, I have some concerns specially related to the data used, model specification.The authors claim in page 9 that the sample includes male full-time employees, but then Table 1 presents a dummy variable for Woman. Clarify this point.What is Y in equation (1)? What is the sub-index i in equation (1)? These issues need to be clarifiedThe authors should also define how pay/income is defined. In page 15, when results of Model 1b on Table 2 are commented, the authors said that offshoring is not significant but this is not true according to what is presented in Table 2 (-0.036**)More explanation about the non-significance of offshoring (and interactions) on Job insecurity is needed. I find the justification quite poor.I also miss in the conclusions some managerial implications of the results and whether conclusions just apply to the German case or can be extrapolated to other, for instance, European countries.

Anonymous - Referee Report 2
March 09, 2020 - 14:19
See attached file

Santiago Budría and Juliette Milgram Baleix - Reply to Referee Report 2
June 02, 2020 - 13:12
See attached file