John S. Earle

  • Current position:
    Professor of Public Policy, George Mason University, USA
  • Positions/functions as policy advisor:
    Consultant to World Bank and OECD
  • Research interest:
    Labor economics, development and transition, firm behavior and performance, industry dynamics
  • Website:
  • Affiliations:
    George Mason University, USA, and IZA, Germany
  • Past positions:
    Central European University, Stockholm School of Economics, Stanford University, Upjohn Institute for Employment Research
  • Qualifications:
    PhD Economics, Stanford University, 1988
  • Personal statement about IZA World of Labor:
    World of Labor is another great innovation from IZA. I expect there will come a time when it is indispensable and we will wonder how we ever managed without it
  • Selected publications:
    • “Employment and wage effects of privatization: Evidence from Hungary, Romania, Russia, and Ukraine.” Economic Journal 120:545 (2010): 683-708 (with D. Brown and A. Telegdy).
    • “Complementarity and custom in wage contract violation.” Review of Economics and Statistics XCI:4 (2009): 832-849 (with K. S. Peter).
    • “Helping hand or grabbing hand? State bureaucracy and privatization effectiveness.” American Political Science Review 103:2 (2009): 264-283 (with D. Brown and S. Gehlbach).
    • “The productivity effects of privatization: Longitudinal estimates from Hungary, Romania, Russia, and Ukraine.” Journal of Political Economy 114:1 (2006): 61-99 (with D. Brown and Á. Telegdy).
    • “How late to pay? Understanding wage arrears in Russia.” Journal of Labor Economics 20:3 (2002): 661-707 (with K. Sabirianova).
  • Articles

Impact of privatization on employment and earnings

Workers and policymakers may fear that privatization leads to job losses and wage cuts, but what’s the empirical evidence?

October 2014

10.15185/izawol.93 93

by John S. Earle Earle, J

Conventional wisdom and prevailing economic theory hold that the new owners of a privatized firm will cut jobs and wages. But this ignores the possibility that new owners will expand the firm’s scale, with potentially positive effects on employment, wages, and productivity. Evidence generally shows these forces to be offsetting, usually resulting in small employment and earnings effects and sometimes in large, positive effects on productivity and scale. Foreign ownership usually has positive effects, and the effects of domestic privatization tend to be larger in countries with a more competitive business environment.