TY  - RPRT
        AU  - Kim, Gueyon
AU  - Lee, Dohyeon
AU  - Pozzoli, Dario
        TI  - Offshoring, Matching, and Wage Inequality: Theory and Evidence
        PY  - 2025/Jan/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17663
        UR  - https://www.iza.org/publications/dp17663
        AB  - This paper examines how offshoring affects worker skill demands and studies its implications for wage inequality. Using Danish administrative data, we find that offshoring increases firm-level demand for higher skills in occupations with high exposure to foreign competition. This effect is more pronounced in low-productivity firms, highlighting distributional impacts across firms. By constructing a Becker-type worker-firm matching model in a global economy, we demonstrate underlying mechanisms and quantify the role of offshoring-induced adjustments. Offshoring increases firm similarity in worker skill and wages within high-exposed jobs, leading to a decrease in between-firm inequality—a contrast to the effects of technological change.
        KW  - offshoring
KW  - worker-firm matching
KW  - segregation by skill
KW  - wage inequality
KW  - between-firm inequality
        ER  -