The Political Consequences of Offshoring

Abstract

Firms’ increasing possibilities to offshore jobs to other countries have created new risks as well as new opportunities for workers across the world. We analyze the political consequences of this development in advanced capitalist democracies. Building on new developments in trade theory, we argue that low‑skilled individuals in easily offshorable occupations face increasing labor market risks, whereas highly educated individuals mainly benefit from the opportunities generated by the increasing possibility to organize production processes internationally. This affects workers’ policy and partisan preferences. Since job offshorability increases low‑skilled workers’ demand for social and economic protection, it increases their propensity to vote for left parties. Among high‑skilled workers, higher levels of job offshorability should increase their their tendency to vote for liberal and center parties. In contrast, offshorability should not be an important issue for partisan preferences for rightwing and green parties. We test our argument with individual‑level data from multiple waves of the European Social Survey for a sample of 25 countries and find evidence in favor of our hypotheses. This suggests that globalization has the potential to directly affect democratic policymaking in capitalist democracies.