Government outsourcing to third-party vendors is widespread and intended to strengthen the organizational incentive to deliver public services more efficiently. However, it is unclear how outsourcing influences the public workforce, and little is known about the effect on employees who change from working for the government to working for the vendor receiving the outsourcing contract. In this article, we theoretically argue that the introduction of competition and private ownership in public service delivery may have negative consequences for employees’ remuneration, employment, and health outcomes. We assess these arguments using unique individual-level register data of 1,478 Danish relatively low-skilled employees who changed job from public to private employment due to government outsourcing. Using a difference-in-difference (DiD) approach, we estimate the effect on employees’ remuneration, employment and income transfers, and use of health services compared to an exact matched control group of public employees who did not experience outsourcing. Our findings suggest that outsourcing significantly decreased employee remuneration and employment and increased public income transfers, while the effect on health services use was marginal and transitory. Potential mechanisms explaining these findings include the vendor’s incentive to reduce the workforce and increase productivity, the stress of changing jobs, and poorer person–environment fit. The results suggest that outsourcing has high costs for employees, some of which are passed on to the government itself through increased expenditure for public income transfers. We propose pathways for further theoretical and empirical research on employee consequences of government outsourcing.

中文翻译：

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竞争、所有权和政府外包对员工的影响

政府外包给第三方供应商的情况很普遍，旨在加强组织激励以更有效地提供公共服务。然而，目前尚不清楚外包如何影响公共劳动力，对于从为政府工作转变为为接受外包合同的供应商工作的员工的影响也知之甚少。在本文中，我们从理论上论证，在公共服务提供中引入竞争和私有制可能会对员工的薪酬、就业和健康结果产生负面影响。我们使用 1,478 名丹麦技术水平相对较低的雇员的独特个人登记数据评估这些论点，这些雇员因政府外包而从公共部门转为私人部门。使用差异中的差异 (DiD) 方法，我们估计了与未经历外包的公共雇员的完全匹配对照组相比，对员工薪酬、就业和收入转移以及医疗服务使用的影响。我们的研究结果表明，外包显着降低了员工薪酬和就业，增加了公共收入转移，而对医疗服务使用的影响是边际和暂时的。解释这些发现的潜在机制包括供应商减少劳动力和提高生产力的动机、换工作的压力以及较差的人与环境的匹配度。结果表明，外包给员工带来了高昂的成本，其中一些成本通过增加公共收入转移的支出转嫁给了政府本身。