Paying Outsourced Labor: Direct Evidence from Linked Temp Agency-Worker-Client Data

30 Pages Posted: 25 Mar 2020

See all articles by Andres Drenik

Andres Drenik

Columbia University

Simon Jäger

Massachusetts Institute of Technology (MIT)

Pascuel Plotkin

Independent

Benjamin Schoefer

University of California, Berkeley

Multiple version iconThere are 3 versions of this paper

Date Written: March 2020

Abstract

We estimate how much firms differentiate pay premia between regular and outsourced workers. We study temp agency work arrangements where pay setting has previously escaped measurement because existing datasets do not report links between user firms (the workplaces where temp workers perform their labor) and temp agencies (their formal employers). We overcome this measurement challenge by leveraging unique administrative data from Argentina with such links. We estimate that temp agency workers receive 49% of the workplace-specific pay premia earned by regular workers in user firms: the midpoint between the benchmark for insiders (one) and the competitive spot-labor market benchmark (zero).

Suggested Citation

Drenik, Andres and Jäger, Simon and Plotkin, Pascuel and Schoefer, Benjamin, Paying Outsourced Labor: Direct Evidence from Linked Temp Agency-Worker-Client Data (March 2020). CEPR Discussion Paper No. DP14517, Available at SSRN: https://ssrn.com/abstract=3560325

Andres Drenik (Contact Author)

Columbia University ( email )

New York

Simon Jäger

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Pascuel Plotkin

Independent ( email )

Benjamin Schoefer

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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