Workers’ Earnings in the UK Before and after Privatisation: A Study of Five Industries

University of Milano, Working Paper No. 2004-13

28 Pages Posted: 13 Jul 2018

See all articles by Orietta Dessy

Orietta Dessy

University of Milan - Department of Business Policy and Economics

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Date Written: July 2005

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

Suggested Citation

Dessy, Orietta and Florio, Massimo, Workers’ Earnings in the UK Before and after Privatisation: A Study of Five Industries (July 2005). University of Milano, Working Paper No. 2004-13, Available at SSRN: https://ssrn.com/abstract=3200985 or http://dx.doi.org/10.2139/ssrn.3200985

Orietta Dessy

University of Milan - Department of Business Policy and Economics ( email )

Milano, I-20122
Italy

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio 7
I-20122 Milano, 20122
Italy
+39 02 50321510 (Phone)
+39 02 50321505 (Fax)

HOME PAGE: http://www.demm.unimi.it/ecm/home

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