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Product Market Deregulation's Winners and Losers: US Railroads between 1981 and 2001

Author

Listed:
  • Guido Friebel

    (Goethe University Frankfurt, CEPR and IZA)

  • Gerard McCullough

    (University of Minnesota)

  • Laura Padilla

    (Universidad Loyola Andalucía)

Abstract

To properly account for labor effects of deregulation, one needs data sets that account for workers and firm heterogeneity. We investigate a comprehensive data set on US railroads. It contains detailed finance, output, employment and wage information for six different skill groups. We identify the effect of product market strategies and mergers on employment and earnings of workers. Railroads have downsized and they have restructured the composition of their human resources. The majority of employee groups have benefitted in terms of compensation. Low-skilled workers blue collars and administrative staff have been the main losers following deregulation, in terms of employment. The main winners are managers and locomotive drivers. The right-to-manage model we use has a good fit, except for executives, which indicates relevance of other types of personnel practices, for instance incentive contracts.

Suggested Citation

  • Guido Friebel & Gerard McCullough & Laura Padilla, 2016. "Product Market Deregulation's Winners and Losers: US Railroads between 1981 and 2001," Working Papers 0008, Universidad Loyola Andalucía, Department of Economics.
    • Handle: RePEc:loy:wpaper:0008
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    More about this item

    Keywords

    matched worker/firm data; downsizing; rent-sharing; panel data; right-to-manage model;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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