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Ownership and Wages

Ownership and Wages

Estimating Public-Private and Foreign-Domestic Differentials with LEED from Hungary, 1986 to 2003

(p.229) 7 Ownership and Wages
The Analysis of Firms and Employees
John S. EarleÁlmos Telegdy
University of Chicago Press

Wages in the transition economies of Eastern Europe have changed dramatically in the fifteen years since the collapse of central planning. Average wages tended to decline in the first few years of transition and to rise more recently. At the same time, the economies of the region have experienced massive organizational changes, most prominently large-scale privatization and opening to the global economy, including foreign direct investment. These rapid changes provide a useful context for investigating the relationship between firm ownership and the level of wages. This chapter explores the relationship between wage level and ownership using linked employer-employee data for Hungary. The data cover nearly every tax-paying entity of at least twenty employees in Hungary from 1986 to 2003, and include many more switches of ownership type than in previous research: nearly 1,000 involving foreign companies and nearly 3,500 involving state-owned corporations over the period.

Keywords:   wages, Hungary, ownership, employer-employee data, foreign companies, state-owned corporations, privatization

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