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Workers Displaced Due to Privatization in Turkey:Before Versus After Displacement

Aysıt Tansel ()

No 9719, Working Papers from Economic Research Forum

Abstract: This study, on the impact of privatization on dismissed workers in Turkey, is the first of its kind. It is based on interviews with dismissed workers in the cement and petrochemicals sectors. Severed workers suffered significant earning losses upon re-employment. These losses amounted to an average of 61 per cent for the cement and 57 percent for the Petkim workers. Earning losses were smaller for the more experienced and better educated but were higher for those with higher earnings in state employment; earning losses were not significantly influenced by the tenure in state employment. Welfare losses were higher than those indicated by the earning losses, since the post-dismissal jobs not only paid lower monetary remunerations but were also of lower quality than the state jobs. The nonmonetary aspects of losses are anticipated by two questions which required workers' subjective evaluations of their pre-and post-dismissal welfare. The overwhelming majority of workers considered their current welfare worse than it was during state employment and would have preferred to go back if they could. These results suggest that the attractive monetary and nonmonetary conditions of state employment were unattainable in the private sector.

Date: 1997-04-12, Revised 1997-04-12
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