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Technological Change and Domestic Outsourcing

Author

Listed:
  • Antonin Bergeaud
  • Clément Malgouyres
  • Clément Mazet-Sonilhac
  • Sara Signorelli

Abstract

Does domestic outsourcing react to technological change? We study the staggered diffusion of broadband internet in France in the 2000s and show that connected firms increased their outsourcing expenditures while decreasing the diversity of occupations they employ in-house. Meanwhile, employment in noncore occupations became increasingly concentrated in firms specializing in subcontracting services. Finally, we provide evidence that workers in high-skill occupations experienced salary gains from being outsourced, while workers in low-skill occupations lost out. Overall, we show that the deployment of new technologies stimulated domestic outsourcing in this context, with important implications for labor market inequality.

Suggested Citation

  • Antonin Bergeaud & Clément Malgouyres & Clément Mazet-Sonilhac & Sara Signorelli, 2025. "Technological Change and Domestic Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 43(4), pages 1135-1168.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/730166
    DOI: 10.1086/730166
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