11  The qualification to a first approximation is included because outsourcing will affect measured domestic labor productivity if it leads to a significant change in the skills and wage composition of domestic jobs.
However, outsourcing abroad almost certainly explains little of the recent increase in labor productivity; indeed, if outsourcing results in the loss of high-skill, high-wage jobs in the United States, as many fear, its effect would be to lower rather than to raise domestic labor productivity. 12  Production is measured here by the manufacturing component of the industrial production index.