Effects of Public Transit Policies on Taxi Drivers' Wages

Ann Schwarz-Miller and Wayne K. Talley

Journal of Labor Research, 2003, vol. 24, issue 1, 131-142

Abstract: We investigate the effects of two public transit policies, subsidization and privatization, on the wages of taxi drivers. In theory, transit operating subsidies benefit transit firms at the expense of the taxi industry and its employees. By contrast, the privatization policy of contracting-out transit service to lower cost private providers is potentially beneficial to taxi firms and their drivers. Estimated wage equations confirm that transit operating subsidies have negatively affected taxi driver wages even as they have bolstered transit drivers'wages. Transit privatization has had the predicted positive effect on taxi driver wages, all else held constant. These results suggest that a more accurate assessment of the effect of transit operating subsidies on labor costs must encompass their net effects on the labor costs of the entire urban transportation sector, not just the public transit industry.

Date: 2003
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