Technological Change and Domestic Outsourcing

Antonin Bergeaud, Clément Mazet-Sonilhac (), Clément Malgouyres and Sara Signorelli
Additional contact information
Clément Mazet-Sonilhac: Sciences Po, Paris

No 14603, IZA Discussion Papers from Institute of Labor Economics (IZA)

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 broadband 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: labor market; firm organization; broadband; outsourcing (search for similar items in EconPapers)
JEL-codes: G14 G21 O33 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2021-07
New Economics Papers: this item is included in nep-eff, nep-ict, nep-isf and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Forthcoming - forthcoming in: Journal of Labor Economics

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Related works:
Working Paper: Technological change and domestic outsourcing (2021)
Working Paper: Technological change and domestic outsourcing (2021)
Working Paper: Technological Change and Domestic Outsourcing (2021)
Working Paper: Technological Change and Domestic Outsourcing (2021)
Working Paper: Technological Change and Domestic Outsourcing (2021)
Working Paper: Technological change and domestic outsourcing (2021)
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