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Privatized Firms, Rule of Law and Labor Outcomes in Emerging Markets

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  • Alberto Chong

    ()

  • Gianmarco León

Abstract

This paper takes advantage of a recent large firm-level dataset to compare labor indicators of privatized, private, and public firms around the world, particularly wages, benefits, labor composition, education and training, unionization, and quality of management. While labor productivity increases after privatization, the ratio of permanent workers to temporary workers also increases. Convergence depends to some degree on the quality of the institutions, namely, the rule of law. Not only is this true for the ratio of permanent workers to temporary workers, but also for education of the workforce, and for the manager’s years of experience. On the other hand, the rule of law appears to be less important in the case of labor productivity and training.

Suggested Citation

  • Alberto Chong & Gianmarco León, 2007. "Privatized Firms, Rule of Law and Labor Outcomes in Emerging Markets," Research Department Publications 4524, Inter-American Development Bank, Research Department.
  • Handle: RePEc:idb:wpaper:4524
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    References listed on IDEAS

    as
    1. Chong, Alberto & Guillen, Jorge & López-de-Silanes, Florencio, 2011. "Privatization and labor policies," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1119-1130, October.
    2. Brown, J. David & Earle, John S. & Vakhitov, Volodymyr, 2006. "Wages, layoffs, and privatization: Evidence from Ukraine," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 272-294, June.
    3. Rama,Martin G., 1997. "Efficient public sector downsizing," Policy Research Working Paper Series 1840, The World Bank.
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    5. Bruce C. Fallick, 1996. "A Review of the Recent Empirical Literature on Displaced Workers," ILR Review, Cornell University, ILR School, vol. 50(1), pages 5-16, October.
    6. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
    7. Monteiro, Natalia Pimenta, 2003. "The Impact of Privatisation on Wages: Evidence from the Portugese Banking Industry," Royal Economic Society Annual Conference 2003 156, Royal Economic Society.
    8. Jonathan HASKEL & Stefan SZYMANSKI, 1992. "A Bargaining Theory Of Privatisation," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 63(2), pages 207-227, April.
    9. Rafael La Porta & Florencio López-de-Silanes, 1999. "The Benefits of Privatization: Evidence from Mexico," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1193-1242.
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    11. Sebastián Galiani and Federico Sturzenegger, "undated". "The Impact of Privatization on the Earnings of Restructured Workers," Business School Working Papers longterm, Universidad Torcuato Di Tella.
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    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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