Offshoring: New Perspective on a Policy Issue

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Offshoring New Perspective on a Policy Issue

• Loren Yager, Ph.D.
• Director, International Affairs and Trade
• U.S. GAO

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Offshoring Looking Back to 2004

• Significant political issue in 2004 campaign
• widespread congressional interest
• scale and nature of change not understood
• Goals of 2004 GAO report
• define offshoring
• examine available data

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A Framework for DiscussionLinking Key Concepts
to Available Data
U.S. foreign direct investment
Imports of services
U.S. employment displaced
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Narrow Definition of OffshoringDisplacement
and Imports
U.S. foreign direct investment
Imports of services
Firms import services from foreign suppliers,
displacing U.S. employment
Firms import services from their foreign
affiliates, displacing U.S. employment
U.S. employment displaced
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Broad Definition of OffshoringOther
Combinations
U.S. foreign affiliates produce services for
foreign markets
Firmsimport services from their foreign
affiliates
Firms import services from foreign suppliers
U.S. foreign affiliates displace U.S. exports or
services in foreign markets
U.S. Employment displaced for reasons other than
offshoring
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Available Data Imports of Services
U.S. foreign direct investment
Imports of services
U.S. employment displaced
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U.S. Imports of ServicesCategories of Private
Services
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Imports of ServicesTrends in Key BPT Categories
Includes imports from unaffiliated firms
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Imports of ServicesBPT Imports from India,
2002-2006
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Imports of ServicesSource Countries of BPT
Imports, 2006
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Available DataU.S. Foreign Direct Investment
U.S. Foreign Direct Investment
Imports of Services
U.S. employment displaced
U.S. employment displaced
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U.S. Foreign Direct Investment Selected
Destinations, 2006
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U.S. Foreign Direct InvestmentShare of
Subsidiary Sales to U.S., 2005
Majority owned service firms
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Available DataU.S. Employment Displaced
U.S. Foreign Direct Investment
Imports of Services
U.S. employment displaced
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U.S. Employment DisplacedMass Layoff Survey,
2007
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U.S. Employment DisplacedTrends in Employment,
2001 to 2008
Data from March 2001 to January 2008
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Summary Additional Years Provide Perspective

• Changes in economy create measurement challenges
• available statistics dont always capture trends
• efforts needed to better define and measure
• Uncertainty surrounding trends significantly
  reduced
• improved collection
• additional years of data
• modeling and estimation