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Inter-firm dependency and employment inequalities : Theoretical hypotheses and empirical tests

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  • Corinne Perraudin

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé, SAMOS - Statistique Appliquée et MOdélisation Stochastique - Université Paris I - Panthéon-Sorbonne)

  • Héloïse Petit

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CEE - Centre d'études de l'emploi - Ministère de l'Enseignement supérieur et Recherche - Ministère du Travail, de l'Emploi et de la Santé)

  • Nadine Thèvenot

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Bruno Tinel

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Julie Valentin

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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    Abstract

    This article highlights the importance of power relations in inter-firm relations and analyses their impact on firms' employment management practices. We show, firstly, that the use of subcontracting creates a chain of inter-firm economic dependency because it leads the principal contractor to plan and control the activities of the subcontractors. We then advance the hypothesis that this chain of dependency influences both the skill structure and wage levels. Empirical tests carried out on French data confirm that firms that subcontract outsource execution tasks and that the hierarchy of firms impacts employees' wage levels.

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    Bibliographic Info

    Paper provided by HAL in its series Post-Print with number halshs-00375550.

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    Date of creation: Jan 2009
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    Handle: RePEc:hal:journl:halshs-00375550

    Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00375550
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    Related research

    Keywords: Subcontracting ; skills ; wages ; power relation;

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    1. Susan N. Houseman, 2000. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," Upjohn Working Papers and Journal Articles 01-67, W.E. Upjohn Institute for Employment Research.
    2. Akerlof, George A & Yellen, Janet L, 1990. "The Fair Wage-Effort Hypothesis and Unemployment," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 255-83, May.
    3. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics.
    4. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-45, May.
    5. Abraham, Katharine G & Taylor, Susan K, 1996. "Firms' Use of Outside Contractors: Theory and Evidence," Journal of Labor Economics, University of Chicago Press, vol. 14(3), pages 394-424, July.
    6. Blois, K J, 1972. "Vertical Quasi-Integration," Journal of Industrial Economics, Wiley Blackwell, vol. 20(3), pages 253-72, July.
    7. Silvia Sacchetti & Roger Sugden, 2003. "The Governance of Networks and Economic Power: The Nature and Impact of Subcontracting Relationships," Journal of Economic Surveys, Wiley Blackwell, vol. 17(5), pages 669-692, December.
    8. Jacques Houssiaux, 1957. "Le concept de « quasi-intégration » et le rôle des sous-traitants dans l'industrie," Revue Économique, Programme National Persée, vol. 8(2), pages 221-247.
    9. Samuel Berlinski, 2008. "Wages and Contracting Out: Does the Law of One Price Hold?," British Journal of Industrial Relations, London School of Economics, vol. 46(1), pages 59-75, 03.
    10. Corinne Perraudin & Nadine Thèvenot & Bruno Tinel & Julie Valentin, 2006. "Sous-traitance dans l'industrie et ineffectivité du droit du travail : une analyse économique," Post-Print halshs-00265959, HAL.
    11. Jacques Houssiaux, 1957. "Quasi-intégration, croissance des firmes et structures industrielles," Revue Économique, Programme National Persée, vol. 8(3), pages 385-411.
    12. Damian Grimshaw & Jill Rubery, 2005. "Inter-capital relations and the network organisation: redefining the work and employment nexus," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 1027-1051, November.
    13. Richardson, G B, 1972. "The Organisation of Industry," Economic Journal, Royal Economic Society, vol. 82(327), pages 883-96, September.
    14. Corinne Perraudin & Nadine Thèvenot & Bruno Tinel & Julie Valentin, 2006. "Sous-traitance dans l'industrie et ineffectivité du droit du travail : une analyse économique," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00265959, HAL.
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