To what extent has offshoring reduced inflation?

For OECD countries, one of the positive effects of offshoring to emerging countries has been the decline in inflation, due to the growing import s of low-cost products made in emerging countries. But offshoring will only have been efficient if the purchasing power gain resulting from the decline in inflation has outweighed the purchasing power loss caused by the destruction of manufacturing jobs. We estimate the average inflation gain (i.e. fall in inflation) caused by offshoring since the mid-1990s as: 0.16 percentage point per year in the United States, i.e. 4% in total for the price level; 0.22 percentage point per year in the euro zone, i.e. 5.5% in total; 0.14 percentage point per year in France, i.e. 3.5% in total. We estimate that since the mid-1990s, offshoring has reduced manufacturing jobs by: 22.5% in the United States, i.e. 2.0% of total employment; 2.6% in the euro zone, i.e. 0.4 % of total employment; 9.4% in France, i.e. 1.2 % of total employment. Altogether, a comparison of the cumulative purchasing power gain with the total job losses gives the impression that the purchasing power gain has prevailed, even in the United States.