Year

2006

Series

Upjohn Institute Working Paper No. 06-126

**Published Version**

Journal of Comparative Economics 34(2) (June 2006): 272-294

DOI

10.17848/wp06-126

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 discernible relationship with gender, education, or experience.

Issue Date

February 2006

Sponsorship

Financial support from NCEEER (National Council for East European and Eurasian Research) and EROC (Economic Research and Outreach Center at the Kyiv-Mohyla School of Economics

Subject Areas

LABOR MARKET ISSUES; Job security and unemployment dynamics; Dislocated workers; Wages, health insurance and other benefits; INTERNATIONAL ISSUES; International labor comparisons; Transition economies

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Citation

Brown, J. David, John S. Earle, and Volodymyr Vakhitov. 2006. "Wages, Layoffs, and Privatization: Evidence from Ukraine." Upjohn Institute Working Paper No. 06-126. Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. http://dx.doi.org/10.17848/wp06-126