NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Rhiannon Leigh Jerch

Dyson School of Applied Economics and Management
Cornell University
434 Warren Hall
137 Reservoir Rd, 434 Warren Hall`
United States
Ithaca, New 14850
Tel: 8373348765

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Cornell University

NBER Working Papers and Publications

March 2016Efficient Local Government Service Provision: The Role of Privatization and Public Sector Unions
with Matthew E. Kahn, Shanjun Li: w22088
Local governments spend roughly $1.6 trillion per year to provide a variety of public services ranging from police and fire protection to public schools and public transit. However, we know little about public sector’s productivity in delivering key services. To understand the productivity both over time and across space, we examine public bus service, which represents a standardized output for benchmarking the cost of local government service provision. There is significant dispersion across transit agencies in the operating cost per bus mile with the highest being more than three times as high as the lowest among top 20 largest cities by population. We estimate the cost savings from privatization and explore the political economy of why privatization rates are lower in high cost unioniz...
 
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