Contracting out and labor demand elasticities

Holger Gorg, Pierre Picard and Eric Strobl

No 2005082, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We examine the relationship between contracting out and the wage elasticity of labor demand in outsourcing plants. A simple theoretical model suggests that firms engaged in contracting out have lower wage elasticities. Estimating plant level dynamic labor demand equations for Irish manufacturing we find evidence supportive of this.

Keywords: outsourcing; contracting out; labor demand; elasticities (search for similar items in EconPapers)
Date: 2005-11
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