Privatization and Labor Cost Savings: Evidence from Health Care Services

摘要

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.