Vertical disintegration and training: evidence from a matched employer–employee survey
AbstractThe mechanism through which outsourcing favourably impacts on workplace performance, particularly productivity, is still unclear. I explore the hypothesis that it does so by impacting workers’ training. I use AWIRS-1995, a matched employer–employee survey that reports ample information on the extent of technology and organizational change in Australian workplaces. I find that there is a positive and significant impact of outsourcing on training when I do not control for the correlation between ununobservable factors in these two binary outcomes. However, once I control for this correlation using a bivariate probit estimator, the training impact of outsourcing becomes negative. I then assess the sensitivity of the outsourcing effect to endogeneity by using the method advocated by Altonji et al. (J Polit Econ 113(1):151–184, 2005 ) to find that this latter result persists even in the presence of a low correlation between unobservables. Copyright Springer Science+Business Media, LLC 2012
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Bibliographic InfoArticle provided by Springer in its journal Journal of Productivity Analysis.
Volume (Year): 38 (2012)
Issue (Month): 2 (October)
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Web page: http://www.springerlink.com/link.asp?id=100296
Organizational change; Vertical disintegration; Outsourcing; Training; Older workers; D22; J24; L24;
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
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