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Wages, layoffs, and privatization: Evidence from Ukraine

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  • Brown, J. David
  • Earle, John S.
  • Vakhitov, Volodymyr

Abstract

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. Pre-privatization 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 discernable relationship with gender, education, or experience.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 34 (2006)
Issue (Month): 2 (June)
Pages: 272-294

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Handle: RePEc:eee:jcecon:v:34:y:2006:i:2:p:272-294

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Web page: http://www.elsevier.com/locate/inca/622864

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  1. Belton M. Fleisher & Klara Sabirianova Peter & Xiaojun Wang, 2004. "Returns to Skills and the Speed of Reforms: Evidence from Central and Eastern Europe, China, and Russia," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 2004-703, William Davidson Institute at the University of Michigan.
  2. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W, 1996. "A Theory of Privatisation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(435), pages 309-19, March.
  3. Gorodnichenko, Yuriy & Sabirianova Peter, Klara, 2005. "Returns to schooling in Russia and Ukraine: A semiparametric approach to cross-country comparative analysis," Journal of Comparative Economics, Elsevier, Elsevier, vol. 33(2), pages 324-350, June.
  4. John S. Earle & Klara Z. Sabirianova, 2002. "How Late to Pay? Understanding Wage Arrears in Russia," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 20(3), pages 661-707, July.
  5. Brainerd, Elizabeth, 2002. "Five Years after: The Impact of Mass Privatization on Wages in Russia, 1993-1998," Journal of Comparative Economics, Elsevier, Elsevier, vol. 30(1), pages 160-190, March.
  6. J. David Brown & John S. Earle & Almos Telegdy, 2006. "The Productivity Effects of Privatization: Longitudinal Estimates from Hungary, Romania, Russia, and Ukraine," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 114(1), pages 61-99, February.
  7. Rafael La Porta & Florencio López-De-Silanes, 1999. "The Benefits Of Privatization: Evidence From Mexico," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1193-1242, November.
  8. Philippe Aghion & Olivier J. Blanchard, 1998. "On privatization methods in Eastern Europe and their implications," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 6(1), pages 87-99, 05.
  9. Djankov, Simeon & Murrell, Peter, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3319, C.E.P.R. Discussion Papers.
  10. J. David Brown & John S. Earle, . "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research jse20031, W.E. Upjohn Institute for Employment Research.
  11. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact Of Private Ownership On Corporate Performance In The Transition Economies," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 114(4), pages 1153-1191, November.
  12. Elizabeth Brainerd, 2000. "Women in transition: Changes in gender wage differentials in Eastern Europe and the former Soviet Union," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, ILR Review, Cornell University, ILR School, vol. 54(1), pages 138-162, October.
  13. Jones, Derek C. & Ilayperuma Simon, Kosali, 2005. "Wage determination under plan and early transition: Bulgarian evidence using matched employer-employee data," Journal of Comparative Economics, Elsevier, Elsevier, vol. 33(2), pages 227-243, June.
  14. Munich, Daniel & Svejnar, Jan & Terrell, Katherine, 2005. "Is women's human capital valued more by markets than by planners?," Journal of Comparative Economics, Elsevier, Elsevier, vol. 33(2), pages 278-299, June.
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Cited by:
  1. Natalia Danzer, 2013. "Job Satisfaction and Self-Selection into the Public or Private Sector: Evidence from a Natural Experiment," Ifo Working Paper Series, Ifo Institute for Economic Research at the University of Munich Ifo Working Paper No. 169, Ifo Institute for Economic Research at the University of Munich.
  2. Alberto Chong & Gianmarco León, 2007. "Empresas privatizadas, instituciones y consecuencias laborales en paises emergentes," Research Department Publications, Inter-American Development Bank, Research Department 4525, Inter-American Development Bank, Research Department.
  3. Lehmann, Hartmut & Muravyev, Alexander & Zimmermann, Klaus F., 2012. "The Ukrainian Longitudinal Monitoring Survey: Towards a Better Understanding of Labor Markets in Transition," IZA Discussion Papers 7090, Institute for the Study of Labor (IZA).
  4. Figueiredo, Adelaide & Figueiredo, Fernanda & Monteiro, Natália P. & Straume, Odd Rune, 2012. "Restructuring in privatised firms: A Statis approach," Structural Change and Economic Dynamics, Elsevier, Elsevier, vol. 23(1), pages 108-116.
  5. Gianmarco León & Alberto E. Chong, 2007. "Privatized Firms, Rule of Law and Labor Outcomes in Emerging Markets," IDB Publications 6848, Inter-American Development Bank.
  6. Mathur, Ike & Banchuenvijit, Wanrapee, 2007. "The effects of privatization on the performance of newly privatized firms in emerging markets," Emerging Markets Review, Elsevier, Elsevier, vol. 8(2), pages 134-146, May.

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