The Welfare and Distributional Effects of Domestic Outsourcing: Evidence from Italian Administrative Data
Early Career Reseach Award
Domestic outsourcing represents a landmark of modern labor markets. By outsourcing non‑core tasks – such as cleaning or IT management ‑ to outside business service providers, firms are more able to focus on their core business. This might ultimately lead to an increase in firms’ productivity. At the same time, however, domestic outsourcing can have profound consequences on both incumbent workers (i.e. individuals that remain in the main firm following the outsourcing event) and outsourced workers (i.e. individuals that are forced to leave the main firm following the outsourcing event). Outsourcing can therefore generate significant changes in pay inequality both within and across firms.
This project plans to empirically measure winners and losers following an outsourcing event using Italian administrative data. I also intend to study the overall welfare effect associated with outsourcing.