Off-Shoring: What Are Its Effects?

January 2007 - The House Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies mandated this study in response to growing concerns about the loss of American jobs overseas.

Congress asked the National Academy to gather the facts about off-shoring and make recommendations to address issues raised. This was the third of three National Academy panel reports from a comprehensive review of services off-shoring. This report addressed four critical questions that frame much of the debate about services off-shoring:

  • What is the effect of services off-shoring on the science and engineering labor market?
  • How do temporary high-skilled foreign workers affect services off-shoring?
  • Are U.S. universities keeping pace with the demand for science and engineering workers? Are American students not choosing these careers?
  • What are the effects of foreign direct investment on U.S. employment?

Key Findings

Within this report, the panel recommended that:

  • The President and Congress remove barriers to accepting and retaining high-skilled workers in the United States.
  • The Department of Homeland Security improve its data systems to provide a more accurate accounting of the number of H-1B and L-1 temporary foreign workers actually employed in the U.S. and address other unanswered key questions about them.