TY  - RPRT
        AU  - Estefan, Alejandro
AU  - Gerhard, Roberto
AU  - Kaboski, Joseph
AU  - Kondo, Illenin
AU  - Qian, Wei
        TI  - Outsourcing Policy and Worker Outcomes: Causal Evidence from a Mexican Ban
        PY  - 2026/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18566
        UR  - https://www.iza.org/publications/dp18566
        AB  - Using Mexican economic census data from 1994 to 2019, we document a rising trend in domestic outsourcing, particularly among large firms, and a negative association between outsourcing and labor compensation, including profit sharing and social security. We leverage higher-frequency data from a manufacturing panel survey, matched employer–employee data, and a ban on domestic outsourcing in 2021 to show that the ban reduced outsourcing, increased labor’s share, and reduced markdowns without raising total labor costs or affecting employment, output, or productivity. We propose a theoretical model in which corporate fiscal incentives drive outsourcing and account for the observed empirical patterns.
        KW  - markdowns
KW  - monopsony
KW  - outsourcing
KW  - developing countries
        ER  -