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The Effects of Privatization on Labor in Turkey

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Author Info

  • Aysit Tansel

    ()
    (Department of Economics, METU)

Abstract

The effect of privatization on labor has been one of the least addressed issues. This paper evaluates the impact of privatization on dismissed workers in Turkey. Earnings equations at state employment and after dismissal are estimated and compared to evaluate the changes in worker's welfare. Dismissed workers experienced significant earnings losses upon reemployment. Earnings losses were smaller for the self-employed than for the wage employed. Post-dismissal jobs were not only characterized by lower earnings but also by a lower quality of non-monetary attributes. The magnitude of the true welfare losses is inferred from the subjective evaluations provided by the workers themselves. Workers felt that what they had lost had not been fully compensated by the severance pay they received.

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File URL: http://www.erc.metu.edu.tr/menu/series01/0103.pdf
File Function: First version, 2001
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Bibliographic Info

Paper provided by ERC - Economic Research Center, Middle East Technical University in its series ERC Working Papers with number 0103.

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Length: 19 pages
Date of creation: Mar 2001
Date of revision: Mar 2001
Handle: RePEc:met:wpaper:0103

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Web page: http://www.erc.metu.edu.tr
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Related research

Keywords: Privatization; Labor Retrenchment; Compensation; Turkey;

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References

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  1. Aysit Tansel, 1997. "Workers Displaced Due to Privatization in Turkey:Before Versus After Displacement," Working Papers 9719, Economic Research Forum, revised Dec 1997.
  2. Kletzer, Lori Gladstein, 1989. "Returns to Seniority after Permanent Job Loss," American Economic Review, American Economic Association, vol. 79(3), pages 536-43, June.
  3. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-93, March.
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Cited by:
  1. Druk-Gal, Bat-Sheva & Yaari, Varda, 2006. "Incumbent employees' resistance to implementing privatization policy," Journal of Economic Behavior & Organization, Elsevier, vol. 59(3), pages 374-405, March.

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