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U.S. public transit earnings, employment and privatization

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  • Peoples, James
  • Talley, Wayne K.
  • Wang, Bin

Abstract

This paper uses individual worker and municipal information to examine privatization's influence on public transit workers' earnings and employment. OLS findings on labor earnings reveal that privatization is associated with an erosion of the public transit union premium. These labor earning findings do not change when correcting for privatization heterogeneity, as unobserved worker characteristics do not differ with differing levels of municipal privatization of public transit services. The employment findings reveal that union public transit workers are more likely to be employed in the public sector and this union-nonunion employment probability differential, declines with increasing levels of privatization. This employment result is interpreted as suggesting that labor cost savings from privatization can be derived from the enhanced employment of relatively low wage nonunion workers in the public sector of public transit services.

Suggested Citation

  • Peoples, James & Talley, Wayne K. & Wang, Bin, 2008. "U.S. public transit earnings, employment and privatization," Research in Transportation Economics, Elsevier, vol. 23(1), pages 99-106, January.
    • Handle: RePEc:eee:retrec:v:23:y:2008:i:1:p:99-106
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    References listed on IDEAS

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    1. George J. Borjas, 2002. "The Wage Structure and the Sorting of Workers into the Public Sector," NBER Working Papers 9313, National Bureau of Economic Research, Inc.
    2. Ann Schwarz-Miller & Wayne K. Talley, 2003. "Effects of Public Transit Policies on Taxi Drivers' Wages," Journal of Labor Research, Transaction Publishers, vol. 24(1), pages 131-142, January.
    3. Christopher M. Snyder & Robert P. Trost & R. Derek Trunkey, 2001. "Reducing Government Spending With Privatization Competitions: A Study Of The Department Of Defense Experience," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 108-117, February.
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    Cited by:

    1. Bouf, Dominique & Faivre d’Arcier, Bruno, 2015. "The looming crisis in French public transit," Transport Policy, Elsevier, vol. 42(C), pages 34-41.
    2. Weixia Lyu & Yanan Zheng & Camila Fonseca & Jerry Zhirong Zhao, 2020. "Public-Private Partnership Transformation and Worker Satisfaction: A Case Study of Sanitation Workers in H-City, China," Sustainability, MDPI, vol. 12(13), pages 1-13, July.
    3. James Peoples & Bin Wang, 2009. "The influence of privatization on occupational wages," Economics Bulletin, AccessEcon, vol. 29(3), pages 1940-1946.

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