Pablo Agnese

Offshoring: Facts and numbers at the country level

Offshoring has lately received wide attention. Its potential effects, mainly to be materialized in employment and productivity dislocations, are yet to be fully assessed. However, some consensus has been attained as to how to proxy its theoretical definition at an aggregate level. Here we review the most conventional indices the economic literature has so far produced, and employ them to provide an overview of the extent of the phenomenon for a group of countries. Contrary to common beliefs, our data reveal that offshoring is not exclusive of large developed economies. Further, we highlight the continuing prominence of the manufacturing over the services sector, and observe that while services offshoring is on the rise, it still represents a small fraction of total offshoring.

The Driving Forces Behind The Falling Labour Share And Persistent Unemployment In Japan

Like in most advanced countries, the labour income share in Japan has been falling since the mid‐1970s. However, in contrast to other advanced economies, Japan experienced an exceptional recessive period in the 1990s and 2000s, with the rate of unemployment rising to a historical maximum of 5.5% in 2002, to persist above 4% in subsequent years. In the present paper, we examine the main causes behind the paths followed by the labour income share and the unemployment rate during the post‐1997 crisis period (1997–2002) and the transition years that followed (2002–2009). We do so by estimating a multi‐equation macro model that allows us to look separately at the various components of this particular labour market: wages, output, and employment. Our main finding is that the fall in the labour share can be attributed to the changes that took place within the labour relations system (the weakening of unions mainly) and that the surge in unemployment can be altogether ascribed to the distorting effects of the sizeable and increasing public debt.

More alike than different: the Spanish and Irish labour markets before and after the crisis

Spain and Ireland might seem at first to feature very different labour markets, which go from very tight to very flexible labour conditions. Our analysis, however, goes beyond this simplistic argument and brings to light some important similarities. For this purpose, we estimate a dynamic multi-equation structural model for each country and offer two sets of dynamic simulations that account for the swings of the unemployment rates before and after the 2007 crisis. Our results suggest looking beyond the degree of flexibility in both labour markets and focusing instead on other variables usually neglected by more conventional approaches. In particular, such variables as the growth of capital stock, the growth of labour productivity, and demographics, succeed in explaining a great part of the changes in unemployment in both countries.JEL codesE24, J21, E22, C32

Japan and Her Dealings with Offshoring: An Empirical Analysis with Aggregate Data

First moves towards a real understanding of the offshoring phenomenon date back to very recent times, with employment and productivity effects occupying much of the literature around the subject. In particular for Japan, the studies conducted so far focus on the disaggregate level and put the stress on the productivity side alone. Here I carry out both the analyses of the employment and productivity effects at the aggregate level of the industry, covering the years 1980-2005. Moreover, I consider all industries within the economy and take account of both materials and services offshoring. The results presented here suggest that we can expect a positive effect of services offshoring on employment, and a positive effect of materials offshoring on the growth rate of productivity.

Bubble Economics and Structural Change: The Cases of Spain and France Compared

This paper delves into the recent events that led to the formation of the housing bubble in Spain and the resulting structural change that is arguably needed to put the economy back into the right track. For this purpose, we calibrate a model with different equilibria descriptive of the labor markets in Spain and France, where the unemployment rates went from the same initial spot to very different levels. In addition to this, we run a counterfactual analysis that throws some more light on the performance of the Spanish labor market and the housing bubble. Our results suggest that the unemployment rate in Spain has jumped to much higher levels while switching between equilibria or, what is the same, because of structural change. Moreover, our counterfactuals indicate that, first, there has been an important misdirection of resources into the construction industry mainly fueled by excessively low real interest rates and, second, the Spanish labor reform has fallen short of its own goals.