Offshoring and Changes in Firms’ Domestic Employment: Evidence from the Danish Offshoring Survey

In this paper, we investigate, by merging the Danish linked employer-employee database with a Danish offshoring
survey, the difference in employment between offshoring and non-offshoring firms that are active in manufacturing industries and business services in Denmark. We measure the mean difference on a set of employment characteristics, i.e. employment growth, growth in high skilled employees, and growth in employees with a background in science and engineering, by using a partial propensity score matching approach. The findings of the analyses show that there are clear differences between Danish offshoring and non-offshoring firms in how the employee composition changes over time. The change in employment composition differ considerably between manufacturing industries and business services and on whether firms offshore administrative and technical business functions or other types of business functions.