The effect of private versus public ownership on labour earnings

• Autor(es): Bastos, Paulo ; Monteiro, Natália ; Straume, Odd Rune
• Data: 2011
• Identificador Persistente: http://hdl.handle.net/1822/11997
• Origem: RepositóriUM - Universidade do Minho
• Assunto(s): Privatisation; Wage formation; Trade unions
• Tipo de Documento: Research paper
• Idioma: Inglês

Descrição

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.