Using propensity matching estimators to evaluate the impact of privatization on wages

• Published in: Applied economics Vol. 42; no. 10; pp. 1293 - 1313
• Main Author: Monteiro, Natália Pimenta
• Format: Journal Article
• Language: English
• Published: London Routledge 01-04-2010; Taylor and Francis Journals; Taylor & Francis Ltd; Taylor & Francis (Routledge)
• Series: Applied Economics
• Subjects: Banking industry; Estimating techniques; Impact analysis; Private sector; Privatization; Studies; Wage behaviour; Wage dynamics; Wage inflation; Wage policy; Wages & salaries; Portugal; Social Sciences & Humanities
• ISSN: 0003-6846; 1466-4283
• DOI: 10.1080/00036840701721281

Whether the transfer of ownership rights to the private sector leads to a decline or increase in wage growth is theoretically ambiguous, given that the outcome depends on the uncertain interaction between firms and workers. Using propensity matching techniques, this article investigates the effects of privatization on wages in the Portuguese banking industry. The empirical results, obtained from Quadros de Pessoal for the period between 1989 and 1997, generally show a negative (positive) short-run (long-run) effect of privatization on relative wage growth for both men and women retained in the privatized firms. Moreover, the results show that the most educated and experienced (oldest) workers, as well as those in the high skill occupational categories, were more likely to experience a negative wage effect.