@TechReport{iza:izadps:dp18228, author={Goos, Maarten and Salomons, Anna and Scheer, Bas and Berge, Wiljan Van den}, title={Domestic Outsourcing and Worker Outcomes: Evidence from Staffing Firms}, year={2025}, month={Oct}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={18228}, url={https://www.iza.org/index.php/publications/dp18228}, abstract={The rising incidence of alternative work arrangements, such as outsourcing, raises important questions about worker outcomes in such non-standard labor contracts. We study this question in the Netherlands, a country with a rapid rise in flexible labor contracts, using administrative employer-employee data from 2006--2019. To identify the causal impact of outsourcing, we take advantage of a legal arrangement called "payrolling", where workers hired by one firm are placed on a staffing firm's payroll while maintaining their job duties at the original firm. We find that outsourced workers experience worse labor market outcomes compared to a matched control group. These include persistently lower employment probability, lower hourly wage growth, a lower incidence of permanent contracts, and strikingly reduced pension contributions. This suggests that outsourcing erodes employment protection and job quality and leads to long-term scarring of labor market outcomes.}, keywords={non-standard work arrangements;outsourcing;staffing companies;labor contracts}, }