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Employment and Wage Effects of Privatisation: Evidence from Hungary, Romania, Russia, and Ukraine

We use longitudinal methods and universal panel data on 30,000 initially state-owned manufacturing firms in four transition economies to estimate the impact of privatisation on employment and wages. The results consistently reject job losses and never imply large wage cuts from either domestic or foreign privatisation. The domestic privatisation estimates are close to zero for employment; for wages, they are negative but small in magnitude. Estimated foreign privatisation effects are nearly always positive and sometimes large for both outcome variables. We interpret the employment and wage results in terms of underlying scale, productivity and cost effects of privatisation. Copyright � The Author(s). Journal compilation � Royal Economic Society 2009.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number jse2010.

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Handle: RePEc:upj:weupjo:jse2010
Note: Appears in The Economic Journal 120(545): 683-708
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