The Impact of Privatization of State-Owned Enterprises on Workers

David Arnold

American Economic Journal: Applied Economics, 2022, vol. 14, issue 4, 343-80

Abstract: While privatization of state-owned enterprises (SOEs) remains a popular policy tool in many countries, the impacts on workers are unclear. This paper studies the case of Brazil, which implemented a large privatization program in the 1990s. Following privatization, incumbent workers in privatized SOEs suffer a wage decline of roughly 25 percent relative to a matched control group. Additionally, private sector firms that are connected to privatized SOEs by labor mobility also reduce wages. A summary calculation suggests that privatization decreased the formal sector wage by 3 percent, with about two-thirds of this effect due to the indirect impact on private sector workers.

JEL-codes: J31 J62 L32 L33 O14 O15 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (7)

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DOI: 10.1257/app.20190428

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