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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Joacim Tåg


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Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective


Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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