Details
| Original language | English |
|---|---|
| Pages (from-to) | 918-944 |
| Number of pages | 27 |
| Journal | Journal of the European Economic Association |
| Volume | 11 |
| Issue number | 4 |
| Publication status | Published - 1 Aug 2013 |
Abstract
Do public sector firm ownership and lack of competition matter for wages and employment? To address this question, we consider a large public-sector company that is privatized. Using personnel records, we find employment contract liberalization to generate relative wage losses for older, high-tenure, low-skilled, part-time workers, permanent residents, and women. Employment reductions mostly affect the same groups experiencing a wage decline. Overall, wage liberalization leads to an increase in wage inequality of between 6% and 9%, which-if applied to the whole public sector-would lead to a 52% to 76% closure of the "inequality gap" between the private and public sectors in Europe. Our results suggest that differences between public- and private-sector wage structures found in descriptive studies are to a large extent causal rather than the result of selection into these sectors and that public sector employment and career path regulations limit a firm's ability to maintain a competitive workforce.
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In: Journal of the European Economic Association, Vol. 11, No. 4, 01.08.2013, p. 918-944.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Do public ownership and lack of competition matter for wages and employment? Evidence from personnel records of a privatized firm
AU - Melly, Blaise
AU - Puhani, Patrick A.
PY - 2013/8/1
Y1 - 2013/8/1
N2 - Do public sector firm ownership and lack of competition matter for wages and employment? To address this question, we consider a large public-sector company that is privatized. Using personnel records, we find employment contract liberalization to generate relative wage losses for older, high-tenure, low-skilled, part-time workers, permanent residents, and women. Employment reductions mostly affect the same groups experiencing a wage decline. Overall, wage liberalization leads to an increase in wage inequality of between 6% and 9%, which-if applied to the whole public sector-would lead to a 52% to 76% closure of the "inequality gap" between the private and public sectors in Europe. Our results suggest that differences between public- and private-sector wage structures found in descriptive studies are to a large extent causal rather than the result of selection into these sectors and that public sector employment and career path regulations limit a firm's ability to maintain a competitive workforce.
AB - Do public sector firm ownership and lack of competition matter for wages and employment? To address this question, we consider a large public-sector company that is privatized. Using personnel records, we find employment contract liberalization to generate relative wage losses for older, high-tenure, low-skilled, part-time workers, permanent residents, and women. Employment reductions mostly affect the same groups experiencing a wage decline. Overall, wage liberalization leads to an increase in wage inequality of between 6% and 9%, which-if applied to the whole public sector-would lead to a 52% to 76% closure of the "inequality gap" between the private and public sectors in Europe. Our results suggest that differences between public- and private-sector wage structures found in descriptive studies are to a large extent causal rather than the result of selection into these sectors and that public sector employment and career path regulations limit a firm's ability to maintain a competitive workforce.
UR - http://www.scopus.com/inward/record.url?scp=84880725318&partnerID=8YFLogxK
U2 - 10.1111/jeea.12024
DO - 10.1111/jeea.12024
M3 - Article
AN - SCOPUS:84880725318
VL - 11
SP - 918
EP - 944
JO - Journal of the European Economic Association
JF - Journal of the European Economic Association
SN - 1542-4766
IS - 4
ER -