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Privatization and the decline of labour's share: international evidence from network industries

Azmat, Ghazala, Manning, Alan and Van Reenen, John (2011) Privatization and the decline of labour's share: international evidence from network industries. Economica, 79 (315). pp. 470-492. ISSN 0013-0427

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Abstract

Some authors have suggested that deregulation of product and labour markets is responsible for the decline in Labour's share of GDP. A simple model predicts that privatization is associated with a lower labour share, due to job shedding. We test this hypothesis by focusing on privatization of network industries in the OECD. We find that, on average, privatization accounts for a fifth of the fall of Labour's share, and over half in Britain and France. This is due to lower employment, but it is partially offset by higher wages and falling barriers to entry, which dampen profit margins. © 2012 The London School of Economics and Political Science.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2011 The London School of Economics and Political Science
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Sets: Departments > Economics
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 13 Jul 2012 09:36
URL: http://eprints.lse.ac.uk/44848/

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