Offshoring and labor markets in developing countries

Developing countries' position along the global value chain has gradually transitioned from low-skill producers of intermediate goods, to hubs of business service providers, and more recently to manufacturing bases of highskilled tasks including computer programming and medical professional services. Given this backdrop, what are the labor market consequences and policy implications of offshoring for developing countries? Research suggests the need for a nuanced view, highlighting a need for policymakers to consider tradeoffs along four dimensions: tradeoffs in economic efficiency, employment and productivity growth versus wage inequality, labor standards, and impacts from trade policy.