This January the British medical journal the Lancet caused a kerfuffle with an article that claimed that privatization in post-communist countries was responsible for massive numbers of deaths. The authors of Mass Privatisation and the Post-communist Mortality Crisis argued that privatization resulted in massive layoffs, which in turn resulted in a staggering increase in mortality rates, particularly in Russia. Could it possibly be true that privatization is that bad for the health? The Economist was quick to rebut the argument, pointing out both that correlation is not causation and that countries such as Poland that implemented shock therapy did not experience the rise in mortality that Russia did.
A new paper from John Earle, a Professor of Economics at the Central European University and a Senior Economist at the Upjohn Institute, extends the rebuttal much further. Earle points out that a very basic link in the chain of reasoning of the Lancet authors is missing - namely, mass privatization did not lead to substantial job loss. In fact, the effects on employment were typically neutral or positive (click on Figure 1 below). For the full argument, check out Mass Privatization and Mortality: Is Job Loss the Link? It's quick but well worth the read.