What’s the latest on the economic impact of outsourcing?

Posted by Dwight Steward, Ph.D. | U.S. Economy

According to Moretti, economic studies have generally found that outsourcing is a net good for the U.S. economy.

According to Moretti, many of the outsourced services are complements and not substitutes for the services that we use locally in the U.S.

In addition to citing several economic studies on the topic, Moretti uses the case study of Oracle.  According to Moretti, In 2000 Oracle had 22,008 U.S. workers and 20,919 workers abroad. In 2014, as the company grew the number of jobs outsourced also grew.. By 2014, Oracle had 40,000 in the U.S. and 60,000 abroad.

According to Moretti, this was a net gain for the U.S. even though clearly outsourcing has increased for Oracle.   Many of the U.S. jobs created by Oracle jobs are high paying jobs.  Also, he further shoes that many of the jobs, like routine computer software programmers, were jobs that helped U.S. workers do their jobs better as opposed to replacing the work of native U.S. workers. Further the multiplier effect resulted in many support jobs being created in the U.S.