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The Effects of Privatization on Labor in Turkey

Author

Listed:
  • 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.

Suggested Citation

  • Aysit Tansel, 2001. "The Effects of Privatization on Labor in Turkey," ERC Working Papers 0103, ERC - Economic Research Center, Middle East Technical University, revised Mar 2001.
  • Handle: RePEc:met:wpaper:0103
    as

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    File URL: http://www.erc.metu.edu.tr/menu/series01/0103.pdf
    File Function: First version, 2001
    Download Restriction: no

    References listed on IDEAS

    as
    1. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    2. Aysit Tansel, 1997. "Workers Displaced Due to Privatization in Turkey:Before Versus After Displacement," Working Papers 9719, Economic Research Forum, revised 12 Apr 1997.
    3. Kletzer, Lori Gladstein, 1989. "Returns to Seniority after Permanent Job Loss," American Economic Review, American Economic Association, vol. 79(3), pages 536-543, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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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.

    More about this item

    Keywords

    Privatization; Labor Retrenchment; Compensation; Turkey;

    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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