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Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Does Privatization Hurt Workers? Lessons From Comprehensive Manufacturing Firm Panel Data In Hungary, Romania, Russia, And Ukraine, J. David Brown, John S. Earle, Álmos Telegdy
Upjohn Institute Working Papers
We estimate the effects of privatization on firm-level wages and employment in four transition economies. Applied to longitudinal data on manufacturing firms, our fixed effect and random trend models consistently fail to support workers' fears of job losses from privatization, and they never imply large negative effects on wages; only for domestic privatization in Hungary and Russia are small (3-5%) negative wage effects found. Privatization to foreign investors has positive estimated impacts on both employment and wages in all four countries. The negligible consequences of domestic privatization for workers result from effects on scale, productivity, and costs that are large …
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Wages, Layoffs, And Privatization: Evidence From Ukraine, J. David Brown, John S. Earle, Volodymyr Vakhitov
Upjohn Institute Working Papers
This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernible …