The effect of private versus public ownership on labour earnings

Paulo Bastos, Natália Monteiro and Odd Rune Straume

No 07/2011, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: We examine the impact of privatisation on wage formation in unionised labour markets. Using longitudinal worker-firm data for Portugal spanning the period 1991-2007, we find that privatisation leads to higher wages, and show that this effect is driven by the fact that privatised firms tend to pay larger mark-ups on the union wage floor. These findings accord with a theoretical model in which actual paid wages are determined via sector-wide collective bargaining and firm-specific "fair-wage" policies, and where private ownership affects wage-setting incentives in both of these stages.

Keywords: Privatisation; wage formation; trade unions. (search for similar items in EconPapers)
JEL-codes: D21 J31 J51 L13 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-lab
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Journal Article: The effect of private versus public ownership on labour earnings (2014)
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