The impact of service and goods offshoring on employment: Firm-level evidence

We use a newly constructed database of Belgian firms that combines individual transaction-level data on international trade in goods and services with annual financial accounts to produce fresh evidence on the impact of goods and service offshoring on employment and other firms' outcomes for both the manufacturing industry and service sector. Our results show that: (i) goods offshoring has a positive impact on employment growth of both low- and high-educated workers in manufacturing, but this effect is substantially reduced when controlling for scale effects, (ii) service offshoring has a negative impact on employment growth among high-educated workers in the service sector and (iii) the substitutability between offshoring and domestic non-labour inputs is higher than the one between offshoring and labour.