Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data

by Sabrina I. Pacifici on June 20, 2013

Outsourcing and Insourcing Jobs in the U.S. Economy: Evidence Based on Foreign Investment Data. James K. Jackson Specialist in International Trade and Finance, June 21, 2013

“The United States is the largest foreign direct investor in the world and the largest recipient of  such investment funds. This active role in foreign investment continues to drive a national debate  over various aspects of foreign investment, including the impact on employment; the implications  for national security of foreign direct investment in U.S. industrial firms; the effect on corporate  research and development; and the implications for high-technology jobs, especially on science
and engineering activities that are deemed to be important for continuing economic advancement.  In 2004, Congress awarded a grant through P.L. 108-447 to the National Academy of Public  Administration (NAPA) to conduct a comprehensive study on outsourcing, or off-shoring, and its  major economic effects, particularly on any “associated shifts in employment.” The NAPA study  distinguished between outsourcing, or the contracting of services or activities to unaffiliated firms  located either domestically or internationally, and off-shoring, or the shifting of services or  activities abroad to unaffiliated firms or to affiliated firms. The data used in this report, however,  do not distinguish between outsourcing and off-shoring or among a broad range of other activities  that may be associated with foreign investment.”

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