Wages in Rail Markets: Deregulation, Mergers, and Changing Network Characteristics

David E. Davis () and Wesley W. Wilson

MPRA Paper from University Library of Munich, Germany

Abstract: The Stagger’s Act of 1980 largely deregulated the Class I Railroad industry and has had profound effects on labor. Between 1978 and 1994, employment in the industry decreased by about 60 percent, while real wages (average compensation) increased by over 40 percent. Earlier research examined employment effects; in this paper, we develop and estimate compensation effects using firm level data. By using firm level data, we are able to identify the effects of partial deregulation, an accompanying and massive consolidation movement as well as changes in firm operating and network characteristics. Our estimates suggest that mergers contributed 5 to 15 percent; partial deregulation contributed about 20 percent; and changes in firm operating and network characteristics contributed 4 to 5 percent to the overall increase in wages.

Keywords: Wages; mergers; railroads; deregulation (search for similar items in EconPapers)
JEL-codes: D21 D23 D43 D4 (search for similar items in EconPapers)
Date: Written
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Published in Southern Economic Journal 4.69(2005): pp. 865-885

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Journal Article: Wages in Rail Markets: Deregulation, Mergers, and Changing Networks Characteristics (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:7663

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