When SOEs are privatised their employees’ wages, particularly for the less educated, fall dramatically, which also has negative spillover effects on workers at other private sector firms.
Read “The Impact of Privatization of State-Owned Enterprises on Workers” by David Arnold here.
In many countries, privatisation of state-owned enterprises (SOEs) remains a popular policy tool for debt-burdened governments to quickly raise large amounts of revenue. Often, however, workers at state-owned enterprises oppose privatisation, fearing it will lead to layoffs and lower wages. In this VoxDevTalk, David Arnold discusses his work which provides evidence on the impacts of privatisation on workers by studying Brazil’s 1990s privatisation program, and reveals that privatisation can have large, negative impacts on workers.