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


We account for the labour effects around the time of deregulation by investigating a comprehensive data set on US railroads that contains detailed finance, output, employment, and wage information for six different skill groups. We identify the effect of product market strategies and mergers on workers’ employment and earnings. 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 are the main losers. The main winners have been managers and locomotive drivers.

Keywords: Deregulation, Labour Downsizing, Panel Data, US Railroads