American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
The Impact of Privatization of State-Owned Enterprises on Workers
American Economic Journal: Applied Economics
vol. 14,
no. 4, October 2022
(pp. 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.Citation
Arnold, David. 2022. "The Impact of Privatization of State-Owned Enterprises on Workers." American Economic Journal: Applied Economics, 14 (4): 343–80. DOI: 10.1257/app.20190428Additional Materials
JEL Classification
- J31 Wage Level and Structure; Wage Differentials
- J62 Job, Occupational, and Intergenerational Mobility; Promotion
- L32 Public Enterprises; Public-Private Enterprises
- L33 Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
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