Workers' earnings in the UK before and after privatisation: a study of five industries

Orietta Dessy and Massimo Florio

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

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.

Keywords: UK; Privatisation; Workers' earnings; Gas; Electricity; Water; Railways; Air transport. (search for similar items in EconPapers)
JEL-codes: J31 L33 L92 L93 L94 (search for similar items in EconPapers)
Date: 2004-01-01
New Economics Papers: this item is included in nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2004-13

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