Technological Change and Domestic Outsourcing

Antonin Bergeaud, Clément Malgouyres (), Clément Mazet-Sonilhac () and Sara Signorelli
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Antonin Bergeaud: HEC Paris - Ecole des Hautes Etudes Commerciales
Clément Malgouyres: IPP - Institut des politiques publiques, CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique
Clément Mazet-Sonilhac: Bocconi University [Milan, Italy]
Sara Signorelli: CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - GENES - Groupe des Écoles Nationales d'Économie et Statistique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - GENES - Groupe des Écoles Nationales d'Économie et Statistique - IP Paris - Institut Polytechnique de Paris - CNRS - Centre National de la Recherche Scientifique

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Abstract: Does domestic outsourcing react to technological change? We study the staggered diffusion of broadband internet in France in the 2000s and show that connected firms increased their outsourcing expenditures while decreasing the diversity of occupations they employ in-house. Meanwhile, employment in noncore occupations became increasingly concentrated in firms specializing in subcontracting services. Finally, we provide evidence that workers in high-skill occupations experienced salary gains from being outsourced, while workers in low-skill occupations lost out. Overall, we show that the deployment of new technologies stimulated domestic outsourcing in this context, with important implications for labor market inequality.

Date: 2025-10-01
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Published in Journal of Labor Economics, 2025, 43 (4), pp.1135-1168. ⟨10.1086/730166⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05343892

DOI: 10.1086/730166

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