Productivity: the impact of privatisation and liberalisation in public services.

This paper analyses the evolution of labour productivity and its sources in Electricity and Gas, Post and Telecommunication, Inland Transport and Health and Social Work sectors of Austria, Belgium, Germany, Poland, Sweden and the UK in the presence of privatisation and liberalisation process from 1970 to 2004. The results showed that although some degree of labour productivity growth achieved in all sectors and countries, there has also been significant employment decreases except for Health and Social Work sector. Productivity increase/employment decrease trend is even stronger
in the privatisation and liberalisation era for most countries. Decomposition of labour productivity shows that higher productivity, to some extent, was gained at the expense of employment decrease. Although there have been productivity increases in both pre- and post-privatisation periods, the contribution of employment decrease to productivity growth turned out to be quite significant in the post-privatisation period. This brings about the necessity to question the presumption that privatisation brings about higher productivity.