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Technological change and domestic outsourcing

Antonin Bergeaud (), Clément Malgouyres (), Clement Mazet-Sonilhac and Sara Signorelli ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Domestic outsourcing has grown substantially in developed countries over the past two decades. This paper addresses the question of the technological drivers of this phenomenon by studying the impact of the staggered diffusion of broadband internet in France during the 2000s. Our results confirm that broadband technology increases firm productivity and the relative demand for high-skill workers. Further, we show that broad-band internet led firms to outsource some non-core occupations to service contractors, both in the low and high-skill segments. In both cases, we find that employment related to these occupations became increasingly concentrated in firms specializing in these activities, and was less likely to be performed in-house within firms specialized in other activities. As a result, after the arrival of broadband internet, establishments become increasingly homogeneous in their occupational composition. Finally, we provide suggestive evidence that high-skill workers experience salary gains from being outsourced, while low-skill workers lose out.

Keywords: broadband; firm organization; labor market; outsourcing (search for similar items in EconPapers)
Date: 2021-07-28
New Economics Papers: this item is included in nep-bec, nep-eff and nep-ict
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Related works:
Working Paper: Technological change and domestic outsourcing (2021) Downloads
Working Paper: Technological Change and Domestic Outsourcing (2021) Downloads
Working Paper: Technological Change and Domestic Outsourcing (2021) Downloads
Working Paper: Technological Change and Domestic Outsourcing (2021) Downloads
Working Paper: Technological Change and Domestic Outsourcing (2021) Downloads
Working Paper: Technological change and domestic outsourcing (2021) Downloads
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