| This paper examines trends in employment and earnings in the U.S. electricity sector during a period of regulatory reform. Econometric models are specified using a large data set of individual employees from the Current Population Survey. OLS earnings estimations find no evidence of an adverse effect on employee earnings during the period of regulatory reform, even after correction for sample selectivity bias using the Heckman two-step approach. In fact, earnings premiums in the electricity sector have increased over the period of regulatory reform. Probit models do find strong evidence that declines in the probability of electricity sector employment, for many occupations, have occurred during the regulatory reform period. These findings deviate significantly from other restructured industries, with the electricity sector being the first industry to show significant employment declines associated with regulatory reform. Using the Blinder-Oaxaca technique, earnings premiums are calculated for electricity sector employees by occupation. These earnings differential variables are found to have a significant negative impact on employment for a number of occupations. Lastly, a longitudinal analysis is used to examine the experiences of electricity sector workers who leave this industry for new employment. This longitudinal procedure allows for analyzing whether electricity sector earnings premiums depict a compensating differential. While the sample size for this analysis is small, an examination of the mean wages of the employees that made an industry change from the electricity sector suggest they continue to receive high earnings in their new positions. These findings suggest that electric utilities, either unable or unwilling to cut employee earnings, have chosen to become more competitive in a deregulated environment through employment actions. |
