International Outsourcing and Job Loss Fears: An Econometric Analysis of Individual Perceptions

The paper is concerned with the effect of international outsourcing on job loss fears. We combine industry-level outsourcing measures with micro-level data from a large German household panel survey and estimate ordinal fixed-effects models to account for individual unobserved heterogeneity and the ordinal nature of reported job loss fears. Aggregate out-sourcing is not found to substantially or significantly affect job loss fears, but outsourcing to low-wage countries does significantly raise job loss fears whilst outsourcing to high-wage countries significantly lowers job loss fears