Offshoring, tasks, and the skill-wage pattern

• We investigate the relationship between offshoring, wages, and the nature of occu-pational tasks.• Within skill groups, the wage effects of offsshoring depend on the job's degree of interactivity and non-routine content.• Within-industry changes in offsshoring have modest wage effects.• However, wage effects become substantial if cross-industry spillovers are allowed for.

The paper investigates the relationship between offshoring, wages, and the occupational task profile using rich individual-level panel data. Our main results suggest that, when only considering within-industry changes in offshoring, we identify a moderate wage reduction due to offshoring for low-skilled workers, though wage effects in relation to the task profile of occupations are not estimated with sufficient precision. However, when allowing for cross-industry effects of offshoring, i.e. allowing for labor mobility across industries, negative wage effects of offshoring are quite substantial and depend strongly on the task profile of workers' occupations. A higher degree of interactivity and, in particular, non-routine content effectively shields workers against the negative wage impact of offshoring.