PAYING OUTSOURCED LABOR: DIRECT EVIDENCE FROM LINKED TEMP AGENCY-WORKER-CLIENT DATA

Andres Drenik; Simon Jäger; Pascuel Plotkin; Benjamin Schoefer

doi:10.1162/rest_a_01037

PAYING OUTSOURCED LABOR: DIRECT EVIDENCE FROM LINKED TEMP AGENCY-WORKER-CLIENT DATA

Andres Drenik, Simon Jäger, Pascuel Plotkin, Benjamin Schoefer

Research output: Contribution to journal › Article › peer-review

15 Scopus citations

Abstract

We estimate how much firms differentiate pay premia between regular and outsourced workers in temp agency work arrangements. We leverage unique Argentinian administrative data that feature links between user firms (the workplaces where temp workers perform their labor) and temp agencies (their formal employers). We estimate that a high-wage user firm that pays a regular worker a 10% premium pays a temp worker on average only a 4.9% premium, compared to what these workers would earn in a low-wage user firm in their respective work arrangements. This 49% pass-through constitutes the midpoint between the benchmarks for insiders (one) and the competitive spot-labor market (zero).

Original language	English (US)
Pages (from-to)	206-216
Number of pages	11
Journal	Review of Economics and Statistics
Volume	105
Issue number	1
DOIs	https://doi.org/10.1162/rest_a_01037
State	Published - Jan 6 2023
Externally published	Yes

All Science Journal Classification (ASJC) codes

Social Sciences (miscellaneous)
Economics and Econometrics

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10.1162/rest_a_01037

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abstract = "We estimate how much firms differentiate pay premia between regular and outsourced workers in temp agency work arrangements. We leverage unique Argentinian administrative data that feature links between user firms (the workplaces where temp workers perform their labor) and temp agencies (their formal employers). We estimate that a high-wage user firm that pays a regular worker a 10% premium pays a temp worker on average only a 4.9% premium, compared to what these workers would earn in a low-wage user firm in their respective work arrangements. This 49% pass-through constitutes the midpoint between the benchmarks for insiders (one) and the competitive spot-labor market (zero).",

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PAYING OUTSOURCED LABOR: DIRECT EVIDENCE FROM LINKED TEMP AGENCY-WORKER-CLIENT DATA

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