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Skill-Biased Wage Effects of Domestic Outsourcing

Author

Listed:
  • Eren Gürer
  • Erol Taymaz

Abstract

This study examines the impact of domestic outsourcing on the wages of workers performing outsourced tasks in Türkiye, using an administrative employee-employer linked dataset. Outsourcing events are identified by tracking worker flows across firms with specific properties. Unlike existing studies, our dataset incorporates buyer-supplier transactions, enabling us to confirm that a relationship between the predecessor and successor firm begins following the outsourcing event. This improves our ability to identify outsourcing events, which we use to explore wage effects of both high-skilled and low-skilled outsourcing. Our findings indicate that low-skilled workers experience wage losses from domestic outsourcing, while high-skilled, professional workers benefit, suggesting that domestic outsourcing may be one of the factors contributing to rising wage inequality.

Suggested Citation

  • Eren Gürer & Erol Taymaz, 2025. "Skill-Biased Wage Effects of Domestic Outsourcing," CESifo Working Paper Series 11758, CESifo.
  • Handle: RePEc:ces:ceswps:_11758
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    References listed on IDEAS

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    2. Ugur Aytun & Eren Gurer & Erol Taymaz, 2026. "Worker- and Firm-Level Effects of an Outsourcing Ban," ERC Working Papers 2602, ERC - Economic Research Center, Middle East Technical University, revised Apr 2026.

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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