Outsourcing: Impacts on the U.S. Workforce

PLEASE NOTE: New grant proposals are no longer being accepted in this program.

Program Goal

To support impartial, high-quality research that advances scholarly, policy, and public understanding of the prevalence of outsourcing across the U.S. economy and how that outsourcing affects American workers.

The Issue

Though few would deny that outsourcing labor is an important and increasingly deployed business strategy across many sectors of the U.S. economy, the impacts of such on the U.S. workforce have been the subject of little systematic study. Existing data are often sparse or unavailable, and even the most fundamental questions—like how many U.S. workers are doing outsourced work or whether there is more outsourcing today than ten years ago—are difficult or impossible to answer with any confidence or precision. This gap in our knowledge has important consequences. Much economic and policy analysis assumes that workers stand in traditional employer-employee relationships governed by long-standing labor laws and that worker behavior will be structured by these relationships. As outsourced labor—sometimes including alternative work arrangements—becomes a more important part of the U.S. economy, those assumptions no longer hold. What’s vitally needed is a new approach, one that draws on expertise across economics, law, organizational psychology, industrial relations, and management, that seeks to deliver a robust understanding of outsourcing and its impact on U.S. workers and that can be used by employers, employees, and policymakers alike as they work to meets the needs of a modern, information-economy workforce.


Grantmaking seeks to achieve a series of interrelated goals. When proposing a project for consideration, interested grant seekers should consider whether and how a proposed project satisfies one or more of the following objectives.

  • Generate new knowledge by supporting original, high-quality research on the prevalence and impacts of domestic outsourcing by U.S. firms;
  • Advance the capacity for discovery by developing new datasets, data crosswalks, analytic frameworks, and other research infrastructure;
  • Build a thriving, multidisciplinary research community that will endure beyond the program’s timeline;
  • Engage new voices and perspectives by encouraging a diverse cohort of early career scholars to take up the study of outsourcing.
  • Expand understanding of the prevalence and impacts of outsourcing through targeted dissemination of research findings to scholars, policymakers, and the public.


Research questions supported by this program include but are not limited to:

  • How prevalent is outsourcing across the U.S. economy and what are the different forms outsourcing may take (independent contracting, franchising, etc.)?
  • How does outsourcing prevalence vary by industry, by sector, by occupation, by firm structure, by the features of the work being outsourced, or by the characteristics of the workers performing outsourced work?
  • What are the implications of outsourcing on job quality for those hired to do outsourced work?  How does outsourcing affect outsourced workers’ wages and benefits, legal rights and responsibilities, job stability, occupational health and safety of work conditions, opportunities for training and professional advancement, workforce attachment, or relationship to their employer?
  • Do outsourced workers differ from non-outsourced workers in ways that either exacerbate or mitigate these impacts?
  • What features of a firm or industry predict its use of outsourcing?  What characteristics of a class of work are predictive of its being outsourced?
  • What trends are visible in the prevalence of outsourcing within an industry, sector, occupation, or in the economy as a whole?
  • How and in what ways does the regulatory environment affect the prevalence of outsourcing?
  • What new models of worker-firm relations are needed (or which existing models need be modified) to better understand outsourcing and its impacts?
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