NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Measuring Temporary Labor Outsourcing in U.S. Manufacturing

Marcello Estevao, Saul Lach

NBER Working Paper No. 7421
Issued in November 1999
NBER Program(s):   LS   PR

Several analysts claim that firms have been using more flexible work arrangements in order to contain the costly adjustment of labor to changes in economic conditions. In particular, temporary help supply (THS) employment has increased dramatically in the last ten years. However, there is only scant evidence on the industries that are hiring this type of worker. In particular, some anecdotal evidence points to the fact that manufacturing industries have substantially stepped up their demand for THS workers since the mid-1980s. If this is true, not accounting for this flow of workers from the service sector to manufacturing may lead to misleading conclusions about the cyclical and long-term path of manufacturing employment and hours of work. We close this gap by providing several estimates of the number of individuals employed by temporary help supply (THS) firms who worked in the manufacturing sector from 1972 to 1997. One estimate, in particular, is based on a new methodology that uses minimal assumptions to put bounds on the probability that a manufacturing worker is employed by a THS firm. The bounds rely on readily available data on workers' individual characteristics observable in the CPS. We show that manufacturers have been using THS workers more intensively in the 1990s. In addition, the apparent flatness of manufacturing employment in the 1990s can be explained in part by this type of outsourcing from the service sector. Finally, not accounting for THS hours overstated the increase in average annual manufacturing labor productivity by « percentage point during the 1991-1997 period.

download in pdf format
   (434 K)

email paper

A non-technical summary of this paper is available in the April 2000 NBER digest.  You can sign up to receive the NBER Digest by email.

This paper is available as PDF (434 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7421

Users who downloaded this paper also downloaded these:
Mankiw and Swagel w12398 The Politics and Economics of Offshore Outsourcing
Estevao and Lach w7427 The Evolution of the Demand for Temporary Help Supply Employment in the United States
Harrison and McMillan w12372 Outsourcing Jobs? Multinationals and US Employment
Feenstra and Hanson w5424 Globalization, Outsourcing, and Wage Inequality
Holmes and Thornton Snider w14856 A Theory of Outsourcing and Wage Decline
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us