The Evolution of Manufacturing Employment in Canada: The Role of Outsourcing

Abstract

The objective of this report is to examine the impact of outsourcing on manufacturing’s employment share in Canada. The report shows that outsourcing accounts for a small but significant part of the decline in the manufacturing employment share over the 1976-2008 period. Two approaches are used to determine the contribution of outsourcing to the evolution in manufacturing’s employment share in the report. The first approach uses input-output (I-O) analysis to estimate the impact of changes in the I-O structure of the economy on employment shares by industry. The second approach uses aggregate industry-by-occupation employment data to decompose changes in employment shares by industry in various ways.

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