Wages and Contracting Out: Does the Law of One Price Hold?
AbstractWe find that, conditioning on industry of assignment, cleaners and security guards who participate in activities organized by contract companies earn 15 and 17 per cent less, respectively, than workers in those activities organized in-house. These estimates are hardly affected by the inclusion of a set of jointly statistically significant exogenous variables. We can expect that most of the productive traits that characterize a task are transferred to the contractor in the process of contracting out a cleaning or security task. Thus, our findings are hard to rationalize by a simple competitive labour market setting where the law of one price holds. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2007.
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Bibliographic InfoArticle provided by London School of Economics in its journal British Journal of Industrial Relations.
Volume (Year): 46 (2008)
Issue (Month): 1 (03)
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- Dube, Arindrajit & Kaplan, Ethan, 2008.
"Does Outsourcing Reduce Wages in the Low Wage Service Occupations? Evidence from Janitors and Guards,"
Institute for Research on Labor and Employment, Working Paper Series
qt6s89498v, Institute of Industrial Relations, UC Berkeley.
- Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
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