Wage inequality and welfare in developing countries: Privatization and reforms in the short and long run

Chi-Chur Chao, Munirul Nabin, Xuan Nguyen and Pasquale Sgro ()

International Review of Economics & Finance, 2016, vol. 42, issue C, 474-483

Abstract: The impacts of privatization on wage inequality and welfare are considered for developing countries. In the short run, privatization can narrow wage inequality but reduce output of public firms. However, the favorable effect of privatization on lowering wage inequality vanishes in the long run due to the excessive entry of public firms. Thus, a policy recommendation for privatization would be: to avoid rising wage inequality, entry regulation of public firms should be imposed in the short run, and to mitigate the output contraction, complementary structural changes or policy reforms are needed in the transitional period of privatization.

Keywords: Wage inequality; Welfare; Privatization; Developing economies (search for similar items in EconPapers)
JEL-codes: J31 L33 O18 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:42:y:2016:i:c:p:474-483

DOI: 10.1016/j.iref.2015.10.023

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