Employment and Wage Adjustment: Insider and Outsider Control in a Polish Privatization Panel Study

New survey data for a panel of Polish firms is used to study employment and wage adjustment in state-owned enterprises, new private firms, and insider- and outsider- controlled privatized firms. In contrast to earlier studies, dynamic panel data estimators (GMM) allow for endogeneity of observed variables and partial adjustment to shocks. Asymmetric demand and productivity shocks have differeing effects across ownership categories that are missed by the simpler and more aggregated specifications used in the previous transition literature. We do seem to confirm rent-seeking behaviour in insider-controlled firms and find significant size-wage and employment-growth wage effects.