Education and labor market policies in an offshoring global economy*

With rising unemployment and increasing income inequality, the labor market consequences of globalization and offshoring are back in the headlines. This paper summarizes recent research using Danish matched worker-firm data to examine how offshoring affects labor market out-comes. First, a rise in offshoring leads to a shift in the composition of labor demand toward particular occupation types within skill groups. Second, workers displaced from offshoring firms suffer more significant income losses than workers displaced for other reasons. Finally, training programs are used more intensively by workers initially employed by offshoring firms and these workers become reemployed with manufactur-ing firms at a faster pace than other workers. These findings are used to draw some education and labor market policy implications