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The Provision of Social Benefits in State Owned

  • S Estrin
  • M Schaffer
  • I.J. Singh

We use evidence from a survey of approximately 200 Polish state-owned, privatized, and de novo private manufacturing firms to investigate the nature and scope of enterprises-level provision of social benefits, and in particular how enterprise-level social provision is changing with transition, privatization and the emergence of the new private sector. We find that social provision remains surprisingly widespread, and has not been greatly reduced in either the state-owned or the privatized sectors. De novo private firms offer a substantially smaller but still significant range of social provision aside from ownership form are firm sized and employee power ( the latter are not explicitly via the union structure), both of which are associated with higher levels of social provision. Money wages and the provision of social benefits appear to be complementary rather than substitutes. Assets used for the provision of social benefits are concentrated in state-owned firms, but there is relatively little social asset disposal; the de novo private sector is expanding the range of social benefits offered but is not investing significantly in social assets. Social provision has been declining in state-owned firms, less so in privatized firms, and increasingly (modestly) in new private firms. On average the declines determinants of the pace of change aside from ownership form are the size of the firm and its profitability, both of which are associated with increases or slower declines in social provision, in the case of the state-owned sector, provision also declines more slowly when they tax-based income policy (the "popwiek") binds.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0223.

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Date of creation: Feb 1995
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Handle: RePEc:cep:cepdps:dp0223
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  1. Stanley Fischer & Alan Gelb, 1991. "The Process of Socialist Economic Transformation," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 91-105, Fall.
  2. Aghion, Philippe & Blanchard, Olivier & Burgess, Robin, 1994. "The behaviour of state firms in eastern Europe, pre-privatisation," European Economic Review, Elsevier, vol. 38(6), pages 1327-1349, June.
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