Monday, March 20, 2006

Study on Job Outsourcing

We have lot of debate over the loss of jobs in US due to the outsourcing of jobs to lost cost developing countries like India.

Recent research shows that that off shoring has been a limited phenomenon—and one that has contributed only marginally to the labor market’s weak performance in recent years.
Through year-end 2003, the number of jobs embodied in net imports did not exceed 2.4 percent of the country’s total employment.

Moreover, the jobs lost to net trade flows grew at a slower pace after the recession than they did before—dropping from 45,000 jobs per month in 1997-2001 to 30,000 in 2001-03.

These findings provide little support for claims that the transfer of U.S. jobs to overseas workers is largely to blame for the jobless recovery.

They conclude that trade has only modestly affected aggregate U.S. employment does not imply, however, that trade has had no serious consequences for individual workers. Our approach explicitly recognizes that jobs created through trade may, to a greater or lesser extent, offset jobs lost to trade. But even if these job gains and losses roughly balance for the U.S. economy as a whole, they may not do so for individual workers— that is, some workers who lose a job to imports may not immediately find an equivalent position. Quantifying the effects of trade on the well-being of workers is beyond the scope of our analysis. Rather, our study offers a new, net measure of the overall number of jobs embodied in recent trade flows.
I guess this a fair indicator of the fact that IT companies India have lot to look forward in the days to come.With talent becoming a scarce resource and continues restrcition on Visas India will surely be in News for all the good reasons.

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