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Contracting-out and the Interindustry Wage Structure: Do Norms of Internal Equity Matter in Wage Determination?

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  • Samuel G. Berlinski

    (Oxford University)

Abstract

This paper compares the wage of a worker performing an activity for an outside contractor with the wage that the firm contracting for this service would have paid were this worker on its payroll (i.e., working in-house). If norms of internal equity were a binding constraint, the wage paid by the outside contractor should not be expected to be identical to the in-house wage. Our results, obtained using data from the U.S. Current Population Survey and the Input-Output matrix, are consistent with the view that norms of internal equity are binding.

Suggested Citation

  • Samuel G. Berlinski, 2000. "Contracting-out and the Interindustry Wage Structure: Do Norms of Internal Equity Matter in Wage Determination?," Econometric Society World Congress 2000 Contributed Papers 1053, Econometric Society.
    • Handle: RePEc:ecm:wc2000:1053
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    References listed on IDEAS

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    Cited by:

    1. Samuel Berlinski, 2008. "Wages and Contracting Out: Does the Law of One Price Hold?," British Journal of Industrial Relations, London School of Economics, vol. 46(1), pages 59-75, March.

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