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| dc.title | Privatization and Labor Force Restructuring around the World |
| dc.contributor.author | Chong, Alberto E. |
| dc.contributor.author | López-de-Silanes, Florencio |
| dc.contributor.orgunit | Department of Research and Chief Economist |
| dc.coverage | The Caribbean |
| dc.coverage | Central America |
| dc.coverage | South America |
| dc.date.available | 2011-02-04T00:00:00 |
| dc.date.issue | 2003-02-01T00:00:00 |
| dc.description.abstract | Critics of privatization argue that poor labor force restructuring is a key concern and that governments should establish better retrenchment programs. Using new data from a random sample of 400 companies in the world, we test competing theories about the wisdom of retrenchment programs and their effect on prices paid by buyers and re-hiring policies by private owners after privatization. Our results show that adverse selection plagues retrenchment programs carried out by governments before privatization. Controlling for endogeneity, several labor retrenchment policies yield a negative impact on net privatization prices. In confirmation of the adverse selection argument, various types of voluntary downsizing lead to a higher frequency of re-hiring of the same workers by the new private owners. Compulsory skill-based programs are the only type of program that is marginally associated with higher prices and lower re-hiring rates after privatization, but the political and economic costs of this policy may make it somewhat impractical. A qualified do not intervene appears to be the safest bet with respect to labor retrenchment before privatization. |
| dc.identifier.doi | http://dx.doi.org/10.18235/0010812 |
| dc.identifier.url | https://publications.iadb.org/publications/english/document/Privatization-and-Labor-Force-Restructuring-around-the-World.pdf |
| dc.language.iso | en |
| dc.medium | Adobe PDF |
| dc.publisher | Inter-American Development Bank |
| dc.subject | Business Development |
| dc.subject.keywords | WP-485 |
| dc.type | Working Papers |
| idb.identifier.pubnumber | Working Papers |