What Do We Know about Contracting Out in the United States? Evidence from Household and Establishment Surveys

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may ABSTRACTA variety of evidence points to significant growth in domestic contracting out over the last two decades, yet the phenomenon is not well documented. In this paper, we pull together data from various sources to shed light on the extent of and trends in domestic outsourcing, the occupations in which it has grown, and the industries engaging in outsourcing for the employment services sector, which has been a particularly important area of domestic outsourcing. In addition, we examine evidence of contracting out of selected occupations to other sectors. We point to many gaps in our knowledge on trends in domestic outsourcing and its implications for employment patterns and to inconsistencies across data sets in the information that is available. We recommend steps to improve data in this area. While much attention has been given to the apparent growth of imported goods and services inputs-socalled offshoring or offshore outsourcing-our paper focuses on contracting out that occurs within theUnited States-what we term domestic contracting out or outsourcing.A variety of evidence has pointed to significant growth in domestic contracting out over the last two decades (Abraham 1990;Abraham and Taylor 1996;Segal 1996; Segal and Sullivan 1997;Theodore and Peck 2002). When organizations outsource tasks to a contract company, the employer of record for workers performing the tasks changes, and frequently so too does the industry in which the workers are employed. Thus, large shifts in the patterns of domestic outsourcing may affect the industry structure of employment in the economy.Accurately measuring growth in outsourcing and the industries engaging in it, we argue, is important for understanding the changing industrial structure of employment in the U.S. economy, constructing and interpreting sectoral productivity statistics, assessing the role outsourcing plays in adjustment mechanisms, and understanding its implications for workers and a variety of labor market policies. Yet the phenomenon is not well documented. In this paper, we pull together a variety of evidence on the extent of and trends in domestic outsourcing, the occupations in which it has grown, and the industries engaging in outsourcing for the employment services sector, which has been a particularly important area of domestic outsourcing. In addition, we examine evidence of the contracting out of selected occupations to other sectors. We point to man...

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