Domestic Outsourcing and Worker Outcomes: Evidence from Staffing Firms
with Maarten Goos, Anna Salomons and Bas Scheer
R&R Review of Economics and Statistics
IZA Discussion Paper (link) (and older version: CPB Discussion Paper (link)
The rising incidence of alternative work arrangements, such as outsourcing, raises important questions about worker outcomes in such non-standard labor contracts. We study this question in the Netherlands, a country with a rapid rise in flexible labor contracts, using administrative employer-employee data from 2006--2019. To identify the causal impact of outsourcing, we take advantage of a legal arrangement called "payrolling", where workers hired by one firm are placed on a staffing firm's payroll while maintaining their job duties at the original firm. We find that outsourced workers experience worse labor market outcomes compared to a matched control group. These include persistently lower employment probability, lower hourly wage growth, a lower incidence of permanent contracts, and strikingly reduced pension contributions. This suggests that outsourcing erodes employment protection and job quality and leads to long-term scarring of labor market outcomes.
The Effect of Adverse Life-Events on Income Trajectories
with Simon Rabate, Maxime To, Julie Treguier and Willem van der Wal
CPB Discussion Paper (link) and Dutch summary in ESB (link)
This paper studies and compares the effect of different adverse life events -- job loss, disability and health shocks, divorce and spousal death -- on individuals' income trajectories. We use an harmonized design across events in terms of methodology and data: matching difference-in-difference with exhaustive Dutch administrative registers. We assess the effect of adverse events on different margins. We compare their effect on primary and disposable household income in order to measure the public insurance to the shocks provided by the tax and transfer system. Both between different events and within different groups for a given event, we find that the importance of government insurance increases with the severity of the shock on primary income. However, we find that certain groups of the population are relatively less protected against adverse life events, such as young people facing a large health shock or secondary earners facing a divorce.
Technological Change, Job Loss and Disability Insurance
with Bram Wouterse
Working paper coming soon!
Technological change may increase disability insurance (DI) receipt not only by affecting workers’ health, but also by lowering the labor-market value of their skills. We study this mechanism using Dutch administrative data on workers displaced in mass layoffs. Exploiting variation in occupational routine task intensity in a triple-differences design, we find that a one standard deviation increase in exposure to technological change raises cumulative DI entry by 0.60 percentage points within six years after displacement, increasing the average displacement effect by about 20%. We decompose this effect into health, application, and award channels. The increase in DI entry is entirely driven by additional applications. We find no effect on medication-based health risk and no increase in the conditional award rate among applicants. Induced applicants are awarded DI at the same rate as other applicants, suggesting that displacement triggers applications among workers who already satisfy eligibility criteria. Assessors are not more lenient for this group. These findings imply that in earnings-loss-based DI systems, disability insurance partly functions as insurance against the labor-market consequences of technological change.
The Effect of Minimum Wage Increases on Youth Crime and Economic Independence (with Ruben van Loon and Timo Verlaat)
The Costs of Waiting: Health Effects of Waiting for Disability Insurance
The Effect of Introducing an Hourly Minimum Wage (with Ruben van Loon)
Labor market effects of wage subsidies for minimum wage workers
Do parents work more when children are in school? Evidence from the Netherlands (joint with Lisette Swart and Karen van der Wiel): CPB Discussion Paper (link), IZA Discussion Paper (link)
Knowledge diffusion across regions and countries: evidence from patent citations. (joint with Jonneke Bolhaar and Roel van Elk): CPB Discussion Paper (link)