IDEAS home Printed from https://ideas.repec.org/a/sae/reorpe/v49y2017i4p513-528.html
   My bibliography  Save this article

Domestic Outsourcing, Rent Seeking, and Increasing Inequality

Author

Listed:
  • Eileen Appelbaum

Abstract

This paper argues that an important mechanism linking increasing rents and the rising earnings’ inequality among workers with similar skills is the increase in domestic outsourcing and the growth of networked forms of production. This has multiplied contractual relationships and legal claims to profit and rents that reflect interfirm power relations. Firms with the greatest clout are able to claim the largest share of the rents; the weakest struggle to remain viable.

Suggested Citation

  • Eileen Appelbaum, 2017. "Domestic Outsourcing, Rent Seeking, and Increasing Inequality," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(4), pages 513-528, December.
    • Handle: RePEc:sae:reorpe:v:49:y:2017:i:4:p:513-528
    DOI: 10.1177/0486613417697121
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0486613417697121
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0486613417697121?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Corinne Perraudin & Héloïse Petit & Nadine Thevenot & Bruno Tinel & Julie Valentin, 2014. "Inter-firm dependency and employment inequalities: Theoretical hypotheses and empirical tests on French subcontracting relationships," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00772536, HAL.
    2. Bruce Kogut & Udo Zander, 1992. "Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology," Organization Science, INFORMS, vol. 3(3), pages 383-397, August.
    3. Jae Song & David J Price & Fatih Guvenen & Nicholas Bloom & Till von Wachter, 2019. "Firming Up Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 1-50.
    4. Bruce A. Blonigen & Justin R. Pierce, 2016. "Evidence for the Effects of Mergers on Market Power and Efficiency," Finance and Economics Discussion Series 2016-082, Board of Governors of the Federal Reserve System (U.S.).
    5. Annette Bernhardt & Rosemary Batt & Susan Houseman & Eileen Appelbaum, 2016. "Working Paper: Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," CEPR Reports and Issue Briefs 2016-03, Center for Economic and Policy Research (CEPR).
    6. Deborah Goldschmidt & Johannes F. Schmieder, 2017. "The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 132(3), pages 1165-1217.
    7. Arindrajit Dube & Ethan Kaplan, 2010. "Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards," ILR Review, Cornell University, ILR School, vol. 63(2), pages 287-306, January.
    8. Matthew Y Ma, 2015. "Patent Strategy for a Successful Business," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 10, pages 209-224, World Scientific Publishing Co. Pte. Ltd..
    9. Matthew Y Ma, 2015. "Patent Prosecution," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 7, pages 153-168, World Scientific Publishing Co. Pte. Ltd..
    10. Josh Bivens & Lawrence Mishel, 2013. "The Pay of Corporate Executives and Financial Professionals as Evidence of Rents in Top 1 Percent Incomes," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 57-78, Summer.
    11. Matthew Y Ma, 2015. "Common Practices in Patent Monetization," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 12, pages 236-248, World Scientific Publishing Co. Pte. Ltd..
    12. Annette Bernhardt & Rosemary L. Batt & Susan Houseman & Eileen Appelbaum, 2016. "Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," Upjohn Working Papers 16-253, W.E. Upjohn Institute for Employment Research.
    13. Matthew Y Ma, 2015. "Preparing Your Patent Applications," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 6, pages 128-149, World Scientific Publishing Co. Pte. Ltd..
    14. Matthew Y Ma, 2015. "How to File a U.S. Provisional Patent Application," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 15, pages 290-314, World Scientific Publishing Co. Pte. Ltd..
    15. Chandler, Alfred D., 1990. "Scale and Scope: A Review Colloquium - Scale and Scope: The Dynamics of Industrial Capitalism. By Alfred D. ChandlerJr., with Takashi Hikino · Cambridge, Mass.: Harvard University Press, 1990. xix + ," Business History Review, Cambridge University Press, vol. 64(4), pages 690-735, January.
    16. Rosemary Batt & Hiroatsu Nohara, 2009. "How Institutions and Business Strategies Affect Wages: A Cross-National Study of Call Centers," ILR Review, Cornell University, ILR School, vol. 62(4), pages 533-552, July.
    17. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    18. Ravi Katari, Dean Baker, 2015. "Patent Monopolies and the Costs of Mismarketing Drugs," CEPR Reports and Issue Briefs 2015-11, Center for Economic and Policy Research (CEPR).
    19. Erling Barth & Alex Bryson & James C. Davis & Richard Freeman, 2016. "It's Where You Work: Increases in the Dispersion of Earnings across Establishments and Individuals in the United States," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 67-97.
    20. Yan Li & Orestis A. Panagiotou & Amanda Black & Dandan Liao & Sholom Wacholder, 2016. "Multivariate piecewise exponential survival modeling," Biometrics, The International Biometric Society, vol. 72(2), pages 546-553, June.
    21. Helper, Susan & MacDuffie, John Paul & Sabel, Charles, 2000. "Pragmatic Collaborations: Advancing Knowledge While Controlling Opportunism," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 9(3), pages 443-487, September.
    22. Bernhardt, Annette & Batt, Rosemary & Houseman, Susan & Appelbaum, Eileen, 2016. "Domestic Outsourcing in the U.S.: A Research Agenda to Assess Trends and Effects on Job Quality," Institute for Research on Labor and Employment, Working Paper Series qt2fm4m444, Institute of Industrial Relations, UC Berkeley.
    23. Susan Helper & Mari Sako, 2010. "Management innovation in supply chain: appreciating Chandler in the twenty-first century," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(2), pages 399-429, April.
    24. Matthew Y Ma, 2015. "Patent Evaluation and Patent Maintenance," World Scientific Book Chapters, in: Fundamentals of Patenting and Licensing for Scientists and Engineers, chapter 11, pages 225-235, World Scientific Publishing Co. Pte. Ltd..
    25. Corinne Perraudin & Héloïse Petit & Nadine Thèvenot & Bruno Tinel & Julie Valentin, 2014. "Inter-firm Dependency and Employment Inequalities," Review of Radical Political Economics, Union for Radical Political Economics, vol. 46(2), pages 199-220, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bergeaud, Antonin & Mazet-Sonilhac, Clément & Malgouyres, Clément & Signorelli, Sara, 2021. "Technological Change and Domestic Outsourcing," IZA Discussion Papers 14603, Institute of Labor Economics (IZA).
    2. Bernhardt, Annette & Batt, Rosemary & Houseman, Susan & Appelbaum, Eileen, 2016. "Domestic Outsourcing in the U.S.: A Research Agenda to Assess Trends and Effects on Job Quality," Institute for Research on Labor and Employment, Working Paper Series qt2fm4m444, Institute of Industrial Relations, UC Berkeley.
    3. Annette Bernhardt & Rosemary L. Batt & Susan Houseman & Eileen Appelbaum, 2016. "Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," Upjohn Working Papers 16-253, W.E. Upjohn Institute for Employment Research.
    4. John Schmitt, 2017. "Comments on “Domestic Outsourcing, Rent Seeking, and Increasing Inequality†by Eileen Appelbaum," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(4), pages 529-533, December.
    5. Alexandre Mas & Amanda Pallais, 2020. "Alternative Work Arrangements," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 631-658, August.
    6. Annette Bernhardt & Rosemary Batt & Susan Houseman & Eileen Appelbaum, 2016. "Working Paper: Domestic Outsourcing in the United States: A Research Agenda to Assess Trends and Effects on Job Quality," CEPR Reports and Issue Briefs 2016-03, Center for Economic and Policy Research (CEPR).
    7. Christine A. Riordan & Alexander M. Kowalski, 2021. "From Bread and Roses to #MeToo: Multiplicity, Distance, and the Changing Dynamics of Conflict in IR Theory," ILR Review, Cornell University, ILR School, vol. 74(3), pages 580-606, May.
    8. Elizabeth Weber Handwerker, 2022. "Outsourcing, Occupationally Homogeneous Employers, and Wage Inequality in the United States," Economic Working Papers 522, Bureau of Labor Statistics.
    9. Sean O'Brady & Virginia Doellgast & David Blatter, 2024. "The high costs of outsourcing: Vendor errors, customer mistreatment, and well‐being in call centers," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(1), pages 80-103, January.
    10. Cortes, Guido Matias & Salvatori, Andrea, 2019. "Delving into the demand side: Changes in workplace specialization and job polarization," Labour Economics, Elsevier, vol. 57(C), pages 164-176.
    11. Jonas Hjort & Xuan Li & Heather Sarsons, 2020. "Across-Country Wage Compression in Multinationals," NBER Working Papers 26788, National Bureau of Economic Research, Inc.
    12. Jonas Hjort & Xuan Li & Heather Sarsons, 2020. "Random-Coefficients Logit Demand Estimation with Zero-Valued Market Shares," Working Papers 2020-15, Becker Friedman Institute for Research In Economics.
    13. Delgado, Mercedes & Mills, Karen G., 2020. "The supply chain economy: A new industry categorization for understanding innovation in services," Research Policy, Elsevier, vol. 49(8).
    14. Donald Tomaskovic-Devey & Silvia Maja Melzer, 2020. "The organizational production of earnings inequalities, Germany 1995–2010," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-22, September.
    15. Virginia Doellgast & Matthew Bidwell & Alexander J. S. Colvin, 2021. "New Directions in Employment Relations Theory: Understanding Fragmentation, Identity, and Legitimacy," ILR Review, Cornell University, ILR School, vol. 74(3), pages 555-579, May.
    16. Bas Scheer & Wiljan van den Berge & Maarten Goos & Alan Manning & Anna Salomons, 2022. "Alternative Work Arrangements and Worker Outcomes: Evidence from Payrolling," CPB Discussion Paper 435, CPB Netherlands Bureau for Economic Policy Analysis.
    17. James Spletzer & Elizabeth Weber Handwerker, 2015. "The Role of Establishments and the Concentration of Occupations in Wage Inequality," Working Papers id:7427, eSocialSciences.
    18. Basu, Arnab K. & Chau, Nancy H. & Soundararajan, Vidhya, 2019. "Wage fairness in a subcontracted labor market," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 24-42.
    19. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    20. Philippe Aghion & Antonin Bergeaud & Richard Blundell & Rachel Griffith, 2019. "The Innovation Premium to Soft Skills in Low-Skilled Occupations," Working papers 739, Banque de France.

    More about this item

    Keywords

    inequality; production networks; financialization;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:reorpe:v:49:y:2017:i:4:p:513-528. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.urpe.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.