Full and partial privatization in China: the labor consequences

Kevin Amess, Jun Du, Sourafel Girma

Research output: Working paper

Abstract

This paper is the first paper to present findings evaluating the consequences for employees of full and partial privatization using difference-in-differences combined with propensity score matching. We find: (1) partial privatization causes job creation in contrast to full privatization, which destroys jobs, (2) full privatization causes higher labor productivity improvement than partial privatization, (3) wage increases occur only in partially privatized firms and (4) there are small increases in labor quality investment in both cases. The results suggest partial privatization exploits market discipline to induce labor productivity whilst simultaneously providing welfare improvements for labor. This is the ‘win-win’ outcome predicted by the ‘helping hand’ theory of government. Our results suggest that governments are likely to gain wider support for a program of partial privatization rather than full privatization.
Original languageEnglish
PublisherUniversity of Nottingham
Publication statusUnpublished - 2008

Publication series

NameNottingham University Business School Research Papers
PublisherNottingham University
No.2009-17

Keywords

  • multiple treatments
  • average treatment effect
  • propensity score matching
  • privatization evaluation

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    Amess, K., Du, J., & Girma, S. (2008). Full and partial privatization in China: the labor consequences. (Nottingham University Business School Research Papers; No. 2009-17). University of Nottingham.