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

Abstract

Whether the transfer of ownership rights to the private sector leads to a decline (increase) on wage growth is theo retically ambiguous given that the outcome depends on the uncertain interaction between firms` and workers`behaviour. Using propensity matching techniques, this paper investigates the effects obtained from Quadros de Pessoal for the period between 1989 and 1997, clearly confirm a positive relationship between wage variation and timing of economic restructuring for either men or women retained in the firm. Moreover, the results show that privatisation hit more intensely the most educated, experienced (oldest) and the best paid workforce irrespective of the gender.