Firms' Use of Outside Contractors: Theory and Evidence
Katharine G. Abraham ,
3
( 14 )
Journal of Labor Economics
394-424
July
1996
Abstract

A firm's decision to contract out for business support services may be influenced by the wage and benefit savings it could realize, the volatility of its output demand, and the availability of specialized skills possessed by the outside contractor. Analysis of newly available establishment-level data shows that all three of these factors help to explain observed contracting behavior.

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