Wilhelm Kohler

Dynamic Effects of Offshoring

Offshoring may well have an effect on the educational and occupation decisions of workers. This is the focus of a joint project with Wilhelm Kohler, Inga Heiland, Erdal Yalcing and members of the Ifo Center for International Economics. The researchers have developed a novel model of offshoring based on horizontal skill differentiation of an economy's labour force. Offshoring opens up a way for firms to improve the skill-type matches of their workers. By changing the quality of worker-firm matches, offshoring affects the degree of earnings inequality in the labour market. From an ex ante perspective, it lowers the income risk associated with the acquisition of skills and thus the skill formation decisions of risk-averse individuals. The research, to be continued during Mr Kohler's visit, will explore the welfare and inequality effects of an exogenous reduction in the costs of offshoring.

Wilhelm Kohler is Professor of Economics at the University of Tübingen and Scientific Director of the Institute for Applied Economic Research (IAW), Tübingen. He is also Research Professor in the Ifo Center for International Economics and Fellow of the CESifo Research Network. He was previously Professor of Economics at the University of Linz and Professor of Economics at the University of Essen. His journal editorships include The Review of International Economics and The Journal of International Economics and Economic Policy. He is also a member of the Review Board for Economics at the German Research Foundation (DFG). His doctorate as well as his postdoctoral degree (Venia Docendi) in Economics are from the Faculty of Economics and Social Science at the University of Innsbruck.