Abstract
This paper estimates the wage differentials between outsourced and in-house workers in Brazil. The simple comparison of average wages of the two groups indicates that outsourced workers earn 17% less, but after controlling by workers fixed effects, the difference drops to 3.6%. In addition, we show that there is great heterogeneity in the wage differential. Telemarketing workers earn 8% less when outsourced. On the other hand, occupations such as security and surveillance offer statistically higher wages, on average, to outsourced workers. The evidence also indicates that the unfavorable differential to the outsourced showed an increase between 2007 and 2012 and a decrease after then.
Keywords:
Labor Market; Outsourcing; Wage Differentials
