Arbeitspapier

Restructuring, Ownership and Efficiency: The Case of Labor in Electricity Generation

This analysis considers improvements in productive efficiency that can result from a movement from a regulated framework to one that allows for market-based incentives for industry participants. Specifically, I look at the case of restructuring in the electricity generation industry. As numerous industries and economies have undergone this sort of transition to varying degrees, it is instructive to assess the performance of market-based incentives relative to what was observed under tighter regulation. Using data from the electricity industry, this analysis considers the total effect of restructuring on one input to the production process – labor – as reflected in employment levels, payroll per employee and aggregate establishment payroll. Using concurrent payroll and employment data from non-utility ("merchant") and utility generators in both restructured and nonrestructured states, I estimate the effect of market liberalization, comprising both new entry and state-level legislation, on employment and payroll in this industry. I find that merchant owners of divested generation assets employ significantly fewer people, but that the payroll per employee is not significantly different from what workers at utility-owned plants are paid. As a result, the new merchant owners of these plants have significantly lower aggregate payroll expenses. Decomposing the effect into a merchant effect and a divestiture effect, I find that merchant ownership is the primary driver of these results.

Sprache
Englisch

Erschienen in
Series: EAG Discussion Paper ; No. EAG 08-12

Klassifikation
Wirtschaft
Labor Force and Employment, Size, and Structure
Legal Monopolies and Regulation or Deregulation
Electric Utilities
Energy: Government Policy
Economics of Regulation
Thema
Energy
Electricity
Restructuring
Regulation
Labor

Ereignis
Geistige Schöpfung
(wer)
Shanefelter, Jennifer K.
Ereignis
Veröffentlichung
(wer)
U.S. Department of Justice, Antitrust Division, Economic Analysis Group (EAG)
(wo)
Washington, DC
(wann)
2008

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Shanefelter, Jennifer K.
  • U.S. Department of Justice, Antitrust Division, Economic Analysis Group (EAG)

Entstanden

  • 2008

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