Private Equity Buyouts and Employee Health
95 Pages Posted: 15 May 2020 Last revised: 16 Feb 2024
Date Written: January 19, 2022
Abstract
We examine the role of employee health for the restructuring of the labor force during private equity buyouts using employee-level data of 56,000 Dutch buyout employees. We find no evidence that buyouts have a negative impact on the health of buyout employees. Employees lose income and employment after buyouts, and these losses are far larger for employees in poorer health. The negative effect of buyouts on employees' incomes is buffered by social transfers, and this buffer is larger for employees in poorer health, who exit the labor market at a much higher rate. Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts.
Keywords: Private Equity, Buyouts, Restructuring, Health, Human Capital Risk, Wages, Unemployment Insurance
JEL Classification: G30, G34, I12, J65, J24, J31, M51
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