Alternative Measures of Offshorability: A Survey Approach

This paper reports on a pilot study of the use of conventional household survey methods to measure something unconventional: what we call offshorability, defined as the ability to perform one’s work duties (for the same employer and customers) from abroad. Notice that offshorability is a characteristic of a person’s job, not of the person himself. We see this research as important for two main reasons. First, one of us has argued previously that offshoring is potentially a very important labor market phenomenon in the United States and elsewhere, perhaps eventually amounting to a third Industrial Revolution. In the first Industrial Revolution, the share of the U.S. workforce engaged in agriculture declined by over 80 percentage points. In the second Industrial Revolution, which is still in progress, the share of American workers employed in manufacturing has declined by almost 25 percentage points so far, with most of the migration going to the service sector. The estimates presented here, like those of Blinder (2009b), suggest that the share of U.S. workers performing what Blinder (2006) called impersonal service jobs (defined precisely below) might shrink significantly while the share performing personal service jobs rises. Second, while readers must judge for themselves, we deem the pilot study to have been successful by several criteria that we will explain later. So we hope our survey methods will be replicated, improved upon, and eventually incorporated into some regular government survey, such as the Current Population Survey (CPS). Doing so would enable the U.S. government to track this important phenomenon over time.