Full and partial privatization in China:the labor consequences


This paper is the first paper to present findings evaluating the consequences for employees of full and partial privatization using difference-in-differences combined with propensity score matching. We find: (1) partial privatization causes job creation in contrast to full privatization, which destroys jobs, (2) full privatization causes higher labor productivity improvement than partial privatization, (3) wage increases occur only in partially privatized firms and (4) there are small increases in labor quality investment in both cases. The results suggest partial privatization exploits market discipline to induce labor productivity whilst simultaneously providing welfare improvements for labor. This is the ‘win-win’ outcome predicted by the ‘helping hand’ theory of government. Our results suggest that governments are likely to gain wider support for a program of partial privatization rather than full privatization.

Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Uncontrolled Keywords: multiple treatments,average treatment effect,propensity score matching,privatization evaluation
Last Modified: 08 Jul 2024 08:31
Date Deposited: 12 Sep 2013 10:03
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Related URLs: http://www.nott ... 2009/09-11.aspx (Publisher URL)
PURE Output Type: Working paper
Published Date: 2008
Authors: Amess, Kevin
Du, Jun (ORCID Profile 0000-0002-0449-4437)
Girma, Sourafel



Version: Published Version

License: Creative Commons Attribution

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