Skill-biased Wage Effects of Domestic Outsourcing

Eren Gürer (egurer@metu.edu.tr) and Erol Taymaz
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Eren Gürer: Department of Economics, Middle East Technical University, Ankara, Turkey

No 2501, ERC Working Papers from ERC - Economic Research Center, Middle East Technical University

Abstract: This study examines the impact of domestic outsourcing on the wages of workers performing outsourced tasks in Türkiye, using an administrative employee-employer linked dataset. Outsourcing events are identified by tracking worker flows across firms with specific properties. Unlike existing studies, our dataset incorporates buyer-supplier transactions, enabling us to confirm that a relationship between the predecessor and successor firm begins following the outsourcing event. This improves our ability to identify outsourcing events, which we use to explore wage effects of both high-skilled and low-skilled outsourcing. Our findings indicate that low-skilled workers experience wage losses from domestic outsourcing, while high-skilled, professional workers benefit, suggesting that domestic outsourcing may be one of the factors contributing to rising wage inequality.

Keywords: domestic outsourcing; subcontracting; wage inequality (search for similar items in EconPapers)
JEL-codes: J31 J41 L24 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2025-03, Revised 2025-03
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Working Paper: Skill-Biased Wage Effects of Domestic Outsourcing (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:met:wpaper:2501

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