Domestic Outsourcing and Worker Outcomes: Evidence from Staffing Firms
Maarten Goos, Anna Salomons, Bas Scheer, Wiljan van den Berge
R&R, Review of Economics and Statistics
Abstract
We study what happens to workers when firms outsource jobs in cleaning, catering, logistics, and security to specialised service providers. Using Dutch administrative data, we identify outsourcing events and follow the affected workers, comparing their earnings and employment trajectories to similar workers who were not outsourced.
Research question
How does domestic outsourcing of support functions affect the earnings and employment of the workers who are outsourced?
Why it matters
A growing share of low-wage support work — cleaning, catering, security — has moved out of the firms that use it and into specialised contractors. Whether this reorganisation lowers the pay and security of the affected workers speaks directly to debates about wage inequality and the fissuring of the workplace.
Main findings
- Outsourced workers experience lower earnings relative to comparable workers who remain in-house.
- The losses persist beyond the initial transition rather than reversing quickly.