Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2022-11-13
Number: 22-085/V
Author-Name: Sabien Dobbelaere
Author-Workplace-Name: Vrije Universiteit Amsterdam
Author-Name: Grace McCormack
Author-Workplace-Name: University of Southern California
Author-Name: Daniel Prinz
Author-Workplace-Name: World Bank
Author-Name: Sándor Sóvágó
Author-Workplace-Name: University of Groningen
Title: Firm Consolidation and Labor Market Outcomes
Abstract: Using rich administrative data from the Netherlands, we study the consequences of firm
consolidation for workers. For workers at acquired firms, takeovers are associated with a 8.5%
drop in employment at the consolidated firm and a 2.6% drop in total labor income. These
effects are persistent even four years later. We show that the primary mechanism for this job
loss is labor restructuring at consolidating firms. Specifically, workers with higher-than-expected
pay relative to their human capital and workers with skills that are likely already present at
acquirers are less likely to be retained.

Classification-JEL: G34, J2, J3, M51
Keywords: Takeovers, labor market outcomes, labor restructuring
File-URL: https://papers.tinbergen.nl/22085.pdf
File-Format: application/pdf
File-Size: 1.131.325 bytes
Handle: RePEc:tin:wpaper:20220085