Privatization and labor policies

Alberto Chong, Jorge Guillen, Florencio López-de-Silanes

Research output: Contribution to journalArticle in a journalpeer-review

12 Scopus citations


Using new data we analyze retrenchment programs before privatization, their effect on prices paid and re-hiring policies pursued by the new private owners. We find evidence in support of skimming and adverse selection. We find that some labor retrenchment policies have a negative impact on net privatization prices, even after taking sample selection bias and endogeneity into account. Some downsizing policies may lead to a higher frequency of post-privatization re-hiring. Skill-biased retrenchment programs are the only ones marginally associated with higher privatization prices and minimal re-hiring rates after privatization. But the political and economic costs of such programs may make them impractical.
Original languageEnglish
Pages (from-to)1119-1130
Number of pages12
JournalJournal of Public Economics
Issue number9-10
StatePublished - 1 Oct 2011
Externally publishedYes


  • Adverse selection
  • Downsizing
  • Labor
  • Prices
  • Privatization
  • Re-hiring


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