Abstract

This paper analyzes the labor market eff ects of off shoring in a high-wage home country and how these eff ects crucially depend on (1) job complexity and (2) the characteristics of the destination country. It thereby links several sources: rich administrative data on individuals and plants in the German manufacturing sector, information on a job’s task bundle, and the evolution of imported inputs from low- or high-wage destinations, which are represented by Eastern and Western Europe, respectively. O shoring to these origins has opposing e ffects on German wages with respect to the relative task complexity of jobs: While off shoring to the West puts pressure on the wages of complex jobs and increases the wages of simple jobs, off shoring to the East entails the opposite eff ect. The overall eff ect adds up to a 4.2 percent increase in wages for jobs with high complexity, while low-complexity Jobs see a 3.9 percent decrease in wages.