This document summarizes a presentation given at the 2010 Pennsylvania Workforce Investment Board Symposium about the risks of offshoring Pennsylvania jobs. The presentation analyzed which types of jobs in Pennsylvania are most at risk of being offshored based on their potential for offshorability. It found that about one in four service sector jobs in Pennsylvania and nationwide are at high risk. Pennsylvania has a higher concentration of high-risk jobs and lower concentration of low-risk jobs compared to the nation on average. Higher-paying and degree-required jobs in Pennsylvania generally have lower offshorability than lower-paying and non-degree jobs. At-risk jobs were also dispersed across different Pennsylvania counties.

1. Offshorability of Pennsylvania Jobs:What Are The Risks? 2010 Pennsylvania Workforce Investment Board Symposium June 17, 2010 Rose M. Baker, Ki Seok Jeon, & David L. Passmore Penn State Institute for Research in Training & Development

2. Penn State Institute for ResearchIn Training & Development Rose Baker Assistant Professor & Director Center for Regional Economic & Workforce Analysis Ki Seok Jeon Graduate Assistant & Doctoral Candidate Penn State Institute for Research in Training & Development David Passmore Professor & Director Penn State Institute for Research in Training & Development

3. The movement of home–country jobs to another country—whether or not those jobs go to another company. Offshoring

5. What is your opinion about the offshoring of U.S. jobs? How vulnerable do you believe your job is to being offshored? What about you?

6. Examples of offshoring Firms import services from foreign suppliers, displacing production and workers A U.S.–based company stops producing its accounting and payroll services in–house and instead purchases them from a foreign–based company.

7. Examples of offshoring Firms import services from their foreign affiliates, displacing production and workers. A U.S.–based company moves its accounting and payroll services from its domestic operations to its new foreign–based affiliate set up to produce these services.

8. Examples of offshoring Firms import services from their foreign affiliates. A U.S.–based company imports additional accounting and payroll services to supply its expanding U.S. business, but does not displace any current domestic production or employment. The foreign supplier is the company’s own foreign affiliate.

9. Examples of offshoring Firms import services from foreign suppliers. A U.S.–based company imports additional accounting and payroll to supply its expanding U.S. business, but does not displace any current domestic production or employment. The foreign supplier is an unaffiliated foreign–based company.

10. Examples of offshoring U.S. foreign affiliates produce services for foreign markets. A U.S.–based company produces accounting and payroll services abroad through its foreign affiliates and sells them to other companies abroad. These services do not directly compete against U.S. exports of services.

11. Examples of offshoring U.S. foreign affiliates displace U.S. exports of services in foreign markets. A U.S.–based company produces accounting and payroll services abroad through its foreign affiliates and sells them to other companies abroad. These services compete against U.S. exports of services, displacing production and employment.

12. Some offshoring directly displaces jobs. Some offshoring represents lost opportunity for growth in the home–country. Some offshoring creates new jobs in the home–country. In these examples…

13. We do not examine offshoring — the actual movement of jobs offshore. We do not attempt to account for the number of jobs offshored. Rather, we examined the potential for movement of jobs offshore — offshorability. Our research on offshorability

14. To what degree can the inputs and outputs of the occupation be transmitted electronically or otherwise be easily and cheaply transported? Measuring offshorability

15. To what degree do the duties of this occupation require interaction with other types of workers? Measuring offshorability

16. To what degree is knowledge of social and cultural idiosyncrasies or other local knowledge needed to carry out the tasks of this occupation? Measuring offshorability

17. To what degree can the work of the occupation be routinized or handled by following a script? Measuring offshorability

18. Degree of Offshorability

19. One of every four jobs in service–providing occupations at risk in PA and nation. PA has 9% higher concentration of job at highest risk for offshoring. PA has 13% lower concentration of jobs at lowest risk for offshoring. Pennsylvania compared with nation

20. Pennsylvania high wage occupations were less susceptible to offshoring than low wage jobs in these occupations. Pennsylvania occupations requiring non–degree training and experience were more susceptible to offshoring than jobs requiring associates or bachelors degrees. Jobs susceptible to offshoring were dispersed widely among Pennsylvania counties. Job requirements, pay, & geography

21. Your ideas?

22. Offshorability of Pennsylvania Jobs:What Are The Risks? 2010 Pennsylvania Workforce Investment Board Symposium June 17, 2010 Rose M. Baker, Ki Seok Jeon, & David L. Passmore Penn State Institute for Research in Training & Development