Avoiding the Employment Relationship: Outsourcing and Labour Substitution among French Manufacturing Firms, 1984-2003

Using a comprehensive data set for French manufacturing firms with over twenty employees, the authors quantify the use of outsourcing and show how it has spread since the mid-1980s, leading to the substitution of external labour for in-house labour. Empirical analysis suggests that firms outsource in order to bypass the effects of the employment relationship and circumvent their labour law obligations.

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