Wages, Layoffs, and Privatization: Evidence from Ukraine

1 Pages Posted: 13 Jul 2006

See all articles by J. David Brown

J. David Brown

US Census Bureau Center for Economic Studies; IZA Institute of Labor Economics

John S. Earle

George Mason University - Schar School of Policy and Government; IZA Institute of Labor Economics

Volodymyr Vakhitov

American University Kyiv

Abstract

This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher-skilled employees of larger firms, but there is no discernable relationship with gender, education, or experience.

Keywords: privatization, layoffs, wages, Ukraine

JEL Classification: D21, G34, J23, J31, L33, P23, P31

Suggested Citation

Brown, J. David and Earle, John S. and Vakhitov, Volodymyr, Wages, Layoffs, and Privatization: Evidence from Ukraine. Journal of Comparative Economics, June 2006, Available at SSRN: https://ssrn.com/abstract=886283

J. David Brown (Contact Author)

US Census Bureau Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233
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301-763-8769 (Phone)
301-763-5935 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

John S. Earle

George Mason University - Schar School of Policy and Government ( email )

3351 Fairfax Drive
MS 3B1
Arlington, VA 22201
United States
703-993-8023 (Phone)

HOME PAGE: http://earle.gmu.edu

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Volodymyr Vakhitov

American University Kyiv ( email )

3, Poshtova Sq
Kyiv, Kyiv 04070
Ukraine
04070 (Fax)

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