THE INDIRECT COST-SAVING HYPOTHESIS OF PRIVATISATION - A PUBLIC TRANSPORT LABOR EARNINGS TEST

The hypothesis examined here is that public transport union workers pe rceive privatisation to be a threat to the security of union jobs and respond by moderating their wage demands. However, estimates of the un ion earnings premiums over the non-union earnings of public sector bus drivers indicate there has been no change un the post-privatisation p eriod, compared with the pre-privatisation period.