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Title:Employment and wage effects of privatization: evidence from Hungary, Romania, Russia, and Ukraine PDF Logo
Authors:Brown, J. David
Earle, John S.
Telegdy, Álmos
Issue Date:2008
Series/Report no.:IZA discussion papers 3688
Abstract:We use longitudinal methods and universal panel data on 30,000 initially state-owned manufacturing firms in four transition economies to estimate the impacts of privatization on employment and wages. The results in all four countries consistently reject job losses and they never imply large wage cuts from privatization to either foreign or domestic owners. The domestic privatization estimates are close to zero for employment, while for wages they are negative but small in magnitude; estimated foreign privatization effects are nearly always positive and sometimes large for both outcome variables. We find that the negligible consequences of domestic privatization result from effects on scale, productivity, and costs that are large but offsetting in Hungary and Romania, and from small effects of all types in Russia and Ukraine. The positive employment outcome of foreign ownership results from a substantial scale-expansion effect that dominates the productivity-improvement effect, and the positive wage outcome from productivity improvement dominating the cost-reduction effect.
Subjects:Privatization
employment
wages
foreign ownership
Hungary
Romania
Russia
Ukraine
JEL:D21
Persistent Identifier of the first edition:urn:nbn:de:101:1-2008100865
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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