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The Impact of Deregulation on the Employment and Wages of Airline Mechanics

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  • David Card

Abstract

This paper describes the effects of deregulation on negotiated wage rates and employment levels of aircraft mechanics in the scheduled airline industry. Firm-specific data for the incumbent trunk airlines show relatively small changes in real wage rates since deregulation,and only recent increases in interfirm wage differentials. Employment growth rates, on the other hand, have varied widely among the incumbents, and between the incumbent trunks and the local service and new-entrant airlines. The data suggest that deregulation resulted in a transfer of 5000-7000 maintenance jobs from the incumbent trunks to the smaller airlines. This shift in employment reduced mechanics' earnings in the industry by as much as 5 percent.

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File URL: http://arks.princeton.edu/ark:/88435/dsp01f1881k908
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Bibliographic Info

Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number 570.

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Date of creation: Jun 1985
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Handle: RePEc:pri:indrel:dsp01f1881k908

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Related research

Keywords: deregulation; wage determination; employment determination;

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Cited by:
  1. Jennifer K. Shanefelter, 2008. "Restructuring, Ownership and Efficiency: The Case of Labor in Electricity Generation," EAG Discussions Papers 200812, Department of Justice, Antitrust Division.
  2. David Card, 1989. "Deregulation and Labor Earnings in the Airline Industry," Working Papers 627, Princeton University, Department of Economics, Industrial Relations Section..
  3. Guadalupe, Maria, 2004. "Product Market Competition, Returns to Skill and Wage Inequality," CEPR Discussion Papers 4434, C.E.P.R. Discussion Papers.
  4. Fernandes, Ana & Ferreira, Priscila & Winters, L. Alan, 2013. "Firm Entry Deregulation, Competition and Returns to Education and Skill," CEPR Discussion Papers 9550, C.E.P.R. Discussion Papers.
  5. Natália Pimenta Monteiro, 2004. "Regulatory reform and the Portuguese banking labour market: two decades later," NIPE Working Papers 10/2004, NIPE - Universidade do Minho.
  6. Jeff Borland, 2000. "Economic Explanations of Earnings Distribution Trends in the International Literature and Application to New Zealand," Treasury Working Paper Series 00/16, New Zealand Treasury.
  7. James Peoples, Jr., 1990. "Airline Deregulation and Industry Wage Levels," Eastern Economic Journal, Eastern Economic Association, vol. 16(1), pages 49-58, Jan-Mar.
  8. repec:fth:prinin:247 is not listed on IDEAS
  9. James Peoples, 1998. "Deregulation and the Labor Market," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 111-130, Summer.
  10. Kristen Monaco, 2001. "Examining Industry Effects for Truck Drivers," Review of Industrial Organization, Springer, vol. 18(1), pages 91-103, February.

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