decline. For instance, in _t_ + 2, workers in the treatment arm see relative wages declining by about 10% compared to the control group and declining even further in _t_ + 3.<sup>14</sup> Our results are similar to other studies in Brazil (Arnold, 2022) but differ from those in Sweden (Olsson and T ̊ag, 2021). In Brazil, the adverse effects of privatization seem to be larger and to hold in the medium run, while in Sweden, they are only temporary and of a smaller magnitude. This is likely related to the large wage premium of SOEs in Brazil, which is corrected with the privatization.

The results from panel (a) combine within-firm changes in average wages and workers moving to unemployment or low-paying companies. To disentangle these simultaneous effects, panel (b) focuses on incumbent workers. Although the magnitude of the effect declines slightly, the results are qualitatively similar, suggesting that workers that remained employed in privatized firms also faced a large and negative effect on wages. Figure B1 in the Appendix shows similar results using an alternative, less restrictive matching procedure, as we allow workers in SOEs to match with workers from different sectors and occupations. As a result, our sample increases from 4,824 workers to 15,266. Yet, the results are almost identical.<sup>15</sup> Figure 3 focuses on incumbent workers and explores possible heterogeneities in the effects of privatization. For instance, panel (a) indicates that although college and non-college degree workers are affected by a drop in wages in _t_ + 1, college workers seem more likely to recover from the wage losses. Moreover, panels (b) and (c) suggest that the adverse effects concentrate mainly on younger and short-tenured individuals. Younger individuals face a negative effect of about 20% in _t_ + 3, while the coefficient is not statistically different from zero for older individuals. Similarly, long-tenured individuals observe non-significant effects. Finally, panel (d) shows that workers previously employed in managerial positions are able to avoid wage losses. In fact, although non-statistically significant, the coefficients for managers are positive from _t_ to _t_ + 3. Figure B2 replicates the results using our broader sample and finds similar results for age, tenure, and occupations. However, the difference between college and non-college workers is significantly smaller relative to our baseline results.

> 14One important caveat of our analysis is that we concentrate on the formal sector and assume that workers outside the formal sector have zero income. This is likely not the case, as workers can find jobs in the informal sector or become entrepreneurs following the privatization (Olsson and T ̊ag, 2021). Therefore, our estimates can be interpreted as the maximum decline in wages.

> 15As a robustness check, we take advantage of recent developments in the difference-in-differences literature and apply the multiple periods estimator proposed by (Callaway and Sant’Anna, 2021) in our broader sample. Figure C1 presents the results of this exercise, indicating that, as in the previous results, the negative effect is statistically significant for both groups and smaller for incumbent workers.

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