As more manufacturing and service jobs are outsourced to developing countries, complaints arise domestically that it is responsible for the "jobless growth" in the two research papers recently produced however provide evidence that outsourcing is actually good for American job growth."

The first study, authored by Mihir Desai, Fritz Foley, and James Hines Jr., investigates migration of manufacturing production to developing countries. They show" that 10% greater foreign capital investment is associated with 2.2% greater domestic investment, and that 10% greater foreign employee compensation is associated with 4.0% greater domestic employee compensation.

You may ask: "but the growth is not proportional - growth in the is smaller!"." But this already is a serious blow to those who believe that the impact should have been negative!" Furthermore, 10% growth in compensation for foreign workers is much smaller than 4% growth in compensation for workers (who's pay level starts at least 10 times that of their foreign counterparts.

The second study, authored by Mary Amiti and Shang-Jin Wei, looks into service outsourcing, which is feared by white-collar workers.

They show that," in each of the past 10 years, the value of insourcing (i.e. the value of business services expoerted by a country like the , e.g., high-priced business consultants and lawyers in richer countries offering their services to the rest of the world) has been greater than that of outsourcing! This is true even though the has been running a trade deficit and an overall current account deficit.

Examining 100 sectors of the economy, they also show that there" is no evidence that the most outsourcing-intensive sectors have had systematically slower (or negative) job growth in the last decade. In fact, the millwork and plywood sector, the metal coating, engraving, and allied services sector, and the insurance industry have had some of the fastest increases in service outsourcing but at the same time also some of the fastestrates of job creation.