Offshoring and Employment: Trends and Impacts

Offshoring —the transfer abroad of an industrial activity — has become a fact of life for business. But the practice is often perceived as a threat, especially when it comes to jobs at home. This report sheds new light on the widely debated phenomenon of offshoring. It first describes the great variety of offshoring situations —in manufacturing and in services, conducted by a foreign subcontractor or a corporate affiliate. It then discusses the effects that offshoring can have on domestic employment, both positive and negative. Finally, the policy implications are outlined and ways to limit the downside are presented.