Reference : Contracting out and labor demand elasticities
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Business & economic sciences : Economic systems & public economics
Contracting out and labor demand elasticities
Gorg, Holger [University of Nottingham]
Picard, Pierre M mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Strobl, Eric A [Département d'Économie École Polytechnique > > > ; Institut de Préparation à l'Administration et à la Gestion (IPAG)]
[en] outsourcing ; contracting out ; labor demand ; elasticities
[en] 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.

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