In this paper we offer new evidence on the impact of British privatisations on wages in five selected industries: gas, electricity, water supply, railways and air transport. For the above sectors we construct long time-series of different measures of labour earnings, spanning from 1970 to 2002, taken from the ONS New Earnings Survey (NES). The use of an homogeneous source allows us to compare privatisation experiences quite different between each other. Mainstream privatisation theories suggest that under state ownership workers earn high wages because of unionisation and soft budget constraints, therefore privatisations should reduce wages for employees. We find instead that privatisation has permanent negative effects on real wages only in the gas industry. In the other sectors considered the change of ownership has only temporary effects, either of positive or of negative sign.

Worker’s earnings in the U.K. before and after privatization: a study of five industries / O. Dessy, M. Florio. - [s.l] : Università degli studi di Milano, 2005 Jul. (WORKING PAPER SERIES / DIPARTIMENTO DI ECONOMIA POLITICA E AZIENDALE, UNIVERSITÀ DEGLI STUDI DI MILANO)

Worker’s earnings in the U.K. before and after privatization: a study of five industries

O. Dessy;M. Florio
2005-07

Abstract

In this paper we offer new evidence on the impact of British privatisations on wages in five selected industries: gas, electricity, water supply, railways and air transport. For the above sectors we construct long time-series of different measures of labour earnings, spanning from 1970 to 2002, taken from the ONS New Earnings Survey (NES). The use of an homogeneous source allows us to compare privatisation experiences quite different between each other. Mainstream privatisation theories suggest that under state ownership workers earn high wages because of unionisation and soft budget constraints, therefore privatisations should reduce wages for employees. We find instead that privatisation has permanent negative effects on real wages only in the gas industry. In the other sectors considered the change of ownership has only temporary effects, either of positive or of negative sign.
UK; Privatisation; Workers’ earnings; Gas; Electricity; Water; Railways; Air transport
Settore SECS-P/01 - Economia Politica
http://wp.demm.unimi.it/files/wp/2004/DEMM-2004_013wp.pdf
Working Paper
Worker’s earnings in the U.K. before and after privatization: a study of five industries / O. Dessy, M. Florio. - [s.l] : Università degli studi di Milano, 2005 Jul. (WORKING PAPER SERIES / DIPARTIMENTO DI ECONOMIA POLITICA E AZIENDALE, UNIVERSITÀ DEGLI STUDI DI MILANO)
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/2434/610588
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