We use longitudinal methods and universal panel data on 30,000 initially state-owned
manufacturing firms in four transition economies to estimate the impact of privatisation
on employment and wages. The results consistently reject job losses and never imply
large wage cuts from either domestic or foreign privatisation. The domestic privatisation
estimates are close to zero for employment; for wages, they are negative but small
in magnitude. Estimated foreign privatisation effects are nearly always positive and
sometimes large for both outcome variables. We interpret the employment and wage results
in terms of underlying scale, productivity and cost effects of privatisation.
