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Privatization and Labor Cost Savings: Evidence from Health Care Services

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  • James Peoples
  • Bin Wang

Abstract

This study examines whether privatization is associated with low public sector health care wages and with low probability of public sector employment for health care providers. Findings suggest that privatization contributes significantly to low wages of union health care providers in the public sector. Privatization also contributes to a low probability of public sector employment in this industry, especially to unionized workers. These results indicate that competition enhancing policy can promote lower labor costs even in a service sector that employs a highly skilled work force. Copyright International Atlantic Economic Society 2007

Suggested Citation

  • James Peoples & Bin Wang, 2007. "Privatization and Labor Cost Savings: Evidence from Health Care Services," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(2), pages 145-157, June.
    • Handle: RePEc:kap:atlecj:v:35:y:2007:i:2:p:145-157
    DOI: 10.1007/s11293-006-9049-3
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    References listed on IDEAS

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    Cited by:

    1. Anthony E. Boardman & Aidan R. Vining, 2010. "Assessing the Economic Worth of Public–Private Partnerships," Chapters, in: Graeme A. Hodge & Carsten Greve & Anthony E. Boardman (ed.), International Handbook on Public–Private Partnerships, chapter 8, Edward Elgar Publishing.

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    More about this item

    Keywords

    labor cost; health care services; service sector; I11; J31;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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