The Globalization of Remote Work

Will Digital Offshoring Make Waves in the U.S. Labor Market?

by Tobias Sytsma

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Remote work creates opportunities for organizations to engage in cross-border trade in services and offshoring. Digital offshoring—moving jobs overseas to cheaper locations using digital technologies—could be one of the long-run impacts of the recent remote work boom. In other words, services may be about to go through a period of globalization, like what the manufacturing sector experienced in the late 1990s and early 2000s.

This Perspective looks at the history of offshoring to gain insights into the potential impact digital offshoring may have on U.S. workers. Like previous waves of offshoring, digital offshoring will create winners and losers. However, the scope and scale of digital offshoring could be more extensive than earlier waves of service-sector offshoring.

Given the relatively poor track record of policies designed to compensate workers harmed by earlier waves of globalization, digital offshoring in a world changed by the coronavirus disease 2019 may directly or indirectly affect many workers.

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Funding for this research was made possible by the Lowy family, whose generous gift established the RAND Lowy Family Middle-Class Pathways Center in 2021. This research was conducted within RAND Lowy Family Middle-Class Pathways Center, a part of RAND Education and Labor.

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