Working Paper No. 1201

What is the Cost of Privatization for Workers?

Published: March 5, 2018, revised January 2019Pages: 43Keywords: Employment; Privatization; State-owned enterprises (SOEs); UnemploymentJEL-codes: J24; J63; L33; M51

What is the Cost of Privatization for Workers? Martin Olsson and Joacim Tåg


The world is in the midst of a wave of privatization of state-owned enterprises. We examine how privatization affects workers and how firm-level employment relates to worker-level estimates. Using administrative data from Sweden, we show that following a privatization workers’ unemployment incidence increases by a fifth and their number of unemployment days by a quarter. Labor earnings and labor force participation remain unchanged. Despite increased transitions to unemployment, employment at the firm-level remains unchanged suggesting that firm-level estimates don’t proxy well for worker-level outcomes. These results shed light on the welfare costs of privatization and how they can be mitigated.

Martin Olsson

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martin.olsson@ifn.se

Joacim Tåg

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Ph: +46 8 665 4524
joacim.tag@ifn.se

Global index of the sharing economy

Timbro SEI

2018 Bergh Funcke Wernberg - Timbro Sharing Economy Index-1fHemsidan.jpg

Andreas Bergh, IFN and Lund University, is one of the authors of this book. The Timbro Sharing Economy Index is the first global index of the sharing economy. The index has been compiled using traffic volume data and scraped data, and provides a unique insight into the driving factors behind the peer-to-peer economy.

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