Manufacturers’ Outsourcing to Staffing Services
The authors estimate the effects of U.S. manufacturers’ use of staffing services on measured employment and labor productivity between 1989 and 2009. Using time series data constructed from the Occupational Employment Statistics program, they document the dramatic increase in manufacturers’ use of staffing services to fill core production occupations and to adjust employment levels during recessions. In 2006, just before the current recession, staffing services added an estimated 9.2% to manufacturing employment, a noteworthy increase from the 2.3% they added in 1989. Outsourcing to staffing services significantly dampened measured employment volatility and inflated the growth and volatility of measured labor productivity in manufacturing.