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EMPLOYMENT AND WAGE EFFECTS OF PRIVATISATION: EVIDENCE FROM HUNGARY, ROMANIA, RUSSIA AND UKRAINE

EMPLOYMENT AND WAGE EFFECTS OF PRIVATISATION: EVIDENCE FROM HUNGARY, ROMANIA, RUSSIA AND UKRAINE. J. David Brown, John S. Earle and Almos Telegdy. Presented by Alex Salo. Motivation. Performance gain Productivity raise Wage cuts Job losses Tradeoff?. How?.

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EMPLOYMENT AND WAGE EFFECTS OF PRIVATISATION: EVIDENCE FROM HUNGARY, ROMANIA, RUSSIA AND UKRAINE

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  1. EMPLOYMENT AND WAGE EFFECTS OF PRIVATISATION:EVIDENCE FROM HUNGARY,ROMANIA, RUSSIA AND UKRAINE J. David Brown, John S. Earle and AlmosTelegdy Presented by Alex Salo

  2. Motivation Performance gain Productivity raise Wage cuts Job losses Tradeoff?

  3. How? 30 000 initially state-owned firms From immediate post-Communist period to 2006 Domestic or Foreign? Productivity-improvement effect Scale-expansion effect Cost-reduction effect Productivity-improvement effect

  4. Data Gosgomstat Restricted to manufacturing Under-reporting of wages to avoid taxes Arrears in Ukraine and Russia

  5. Policies and Implications Hungary – fast, foreign, block-holdings Romania – large-scale employee ownership Russia and Ukraine – managers and employees with discount, then secondary trading

  6. Policies and Implications cont.

  7. Empirical Strategy Heterogeneous results Avoid industry fluctuations Politicians influence Statistical techniques to avoid errors and correct bias

  8. Employment effect

  9. Wage effect

  10. Conclusion No strong negative effects on either employment or wages Minor fluctuation in domestic firms Foreign – effects steadily grow onward Less likely negative effects appear in services Overall more positive effects

  11. Questions?

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