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Privatization and labor policies

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  • Chong, Alberto
  • Guillen, Jorge
  • López-de-Silanes, Florencio

Abstract

Using new data we analyze retrenchment programs before privatization, their effect on prices paid and re-hiring policies pursued by the new private owners. We find evidence in support of skimming and adverse selection. We find that some labor retrenchment policies have a negative impact on net privatization prices, even after taking sample selection bias and endogeneity into account. Some downsizing policies may lead to a higher frequency of post-privatization re-hiring. Skill-biased retrenchment programs are the only ones marginally associated with higher privatization prices and minimal re-hiring rates after privatization. But the political and economic costs of such programs may make them impractical.

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Bibliographic Info

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

Volume (Year): 95 (2011)
Issue (Month): 9 ()
Pages: 1119-1130

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Handle: RePEc:eee:pubeco:v:95:y:2011:i:9:p:1119-1130

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Privatization; Prices; Downsizing; Labor; Adverse selection; Re-hiring;

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Cited by:
  1. Liam Wren-Lewis, 2011. "Do infrastructure reforms reduce the effect of corruption? Theory and evidence from Latin America and the Caribbean," Economics Series Working Papers 576, University of Oxford, Department of Economics.
  2. Paulo Bastos & Natália Pimenta Monteiro & Odd Rune Straume, 2012. "Privatization and corporate restructuring," NIPE Working Papers 10/2012, NIPE - Universidade do Minho.
  3. Gianmarco León & Alberto E. Chong, 2007. "Privatized Firms, Rule of Law and Labor Outcomes in Emerging Markets," IDB Publications 6848, Inter-American Development Bank.
  4. Alberto Chong & Gianmarco León, 2007. "Empresas privatizadas, instituciones y consecuencias laborales en paises emergentes," Research Department Publications 4525, Inter-American Development Bank, Research Department.

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