Using a regression discontinuity design, we estimate the cost savings from privatization and explore the political economy of why privatization rates are lower in high cost unionized areas. Fully privatizing all bus transit would generate cost savings of $5.7b, or 30% of total US bus transit operating expenses. The corresponding increased use of public transit from this cost reduction would lead to a gain in social welfare of $524m, at minimum, and at least 26k additional transit jobs.

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