Measuring task content and offshorability

Abstract

Trade economists increasingly relate the offshoring of service occupations to occupational task characteristics. This article provides empirical insights into this relationship and supports the importance of the task dimension as a determinant of offshoring patterns. The results further suggest that offshoring is a multidimensional phenomenon and it is advisable to use a comprehensive set of tasks in the empirical analysis to capture most of the relevant offshorability characteristics.

Keywords:

• tasks
• offshoring
• services
• offshoring costs

JEL Classification:

• C80
• F16
• F23
• J31

Notes

¹ Information is provided by the Bureau of Economic Analysis (input-output tables and detailed statistics for cross-border trade) and by the industry-specific occupational employment and wage estimates of the BLS.

² I focus on continuous indices because the varying degree of offshorability within the group of tradable products is the main interest of the trade-in-tasks literature.

³ Information on FDI flows is obtained from the Bureau of Economic Analysis’ detailed statistics for cross-border trade. The weighting procedure is identical to the one applied to obtain an occupational-level estimate of imported intermediates.

⁴ The results are available upon request. Furthermore, I have also assessed the performance of the occupational ranking resulting from task-based information in the Princeton Data Improvement Initiative (PDII). Similar to Moncarz et al. (2008), in the PDII professional coders categorize occupations according to their offshorability based on a broad array of task characteristics. Unfortunately, the PDII currently only offers information about 212 occupations. Results are available upon request.