Essays on outsourcing, automation and economic justice

This thesis examines how domestic outsourcing and automation shape labour market outcomes, and how the philosophy of John Rawls can inform normative economics and economic policy. It is structured around three distinct essays. The first essay provides the first empirical analysis of the impact of domestic outsourcing on workers in the UK, using matched worker-firm data and focusing on cleaners and security guards. I estimate wage penalties of 2.8% and 5.6% respectively, and show that contractor firms pay systematically lower AKM wage premiums than in-house employers. These differences reflect both lower rents per worker and, for security workers, weaker rent-sharing—highlighting the role of firm-level practices in driving wage inequality. The second essay uses a novel proprietary survey of UK manufacturing sites between 2005 and 2023 to examine the employment effects of CNC machine tools and industrial robots. I show that both technologies are associated with significant increases in employment at adopting plants – between 6% and 9% after four years – compared to a control group of non-adopting plants. I also find positive spillovers on employment among industry competitors and a positive aggregate impact on industry-level employment, challenging the view that automation necessarily displaces workers. The final essay argues that the standard economic interpretation of John Rawls—as an advocate of redistribution justified by a maximin social welfare function—misrepresents the spirit and substance of his theory. I argue that Rawls offers a richer conception of justice, grounded in reciprocity and focused on access to economic power and the social bases of self-respect. I outline the core features of a Rawlsian normative economics—plural in values, grounded in measurable primary goods, and psychologically realistic; and propose a policy agenda centred on predistribution and meaningful work. Together, these essays contribute new evidence on how firms and technologies shape labour market inequality, and offer a rich non-welfarist framework for rethinking the goals and design of economic policy.