What is the Cost of Privatization for Workers?

Martin Olsson and Joacim Tåg

No 1201, Working Paper Series from Research Institute of Industrial Economics

Abstract: The privatization of state owned enterprises is on the agenda across the globe. Using Swedish data covering two decades, we show that productivity gains and headcount reductions are coupled with economic costs for incumbent workers. Workers experience income losses and higher unemployment, but half of the losses are covered by the social safety net. We also find small positive effects on entrepreneurship and cash holdings but no meaningful effects on other labor market, family, health, or household finance outcomes. Productivity improves when the CEO is replaced, and the gains outweigh workers’ income declines by a factor of between two and six.

Keywords: Employment; Entrepreneurship; Family; Health; Household finance; Labor; Privatization; State-owned enterprises (SOEs); Unemployment; Wages (search for similar items in EconPapers)
JEL-codes: G34 J24 J63 L26 L33 M51 (search for similar items in EconPapers)
Pages: 86 pages
Date: 2018-03-05, Revised 2025-03-14
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1201

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