Five Years after: The Impact of Mass Privatizationon Wages in Russia, 1993–1998

The mass transfer of enterprises from state to private hands in Russia is one of the most remarkable events of the past decade, yet little is known about how privatization has affected workers. This paper explores the effect of changing ownership on the wage distribution, focusing on how wage differentials between state-owned and privatized enterprises have evolved over the course of the transition. Privatized state enterprises paid higher wages than state enterprises in 1993 and 1998, but wages in the two sectors are similar in other years. In addition, wages in private firms exceed those in both state and privatized enterprises, but these wage differentials narrowed significantly between 1993 and 1998. J. Comp. Econ., March 2002, 30(1), pp. 160–190. Williams College, Williamstown, Massachusetts 01267; Centre for Economic Policy Research, London, United Kingdom; Institute for the Study of Labor (IZA), Bonn, Germany; and William Davidson Institute, University of Michigan Business School, Ann Arbor. C © 2002 Elsevier Science (USA)