Private equity, layoffs, and job polarization

Martin Olsson*, Joacim Tåg

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

15 Citations (Scopus)

Abstract

Private equity firms are often criticized for laying off workers, but the evidence on who loses their jobs and why is scarce. This paper argues that explanations for job polarization also explain layoffs after private equity buyouts. Buyouts reduce agency problems, which triggers automation and off shoring. Using rich employer-employee data, we show that buyouts generally do not affect unemployment incidence. However, unemployment incidence doubles for workers in less productive firms who performroutine or offshorable job tasks. Job polarization is also much more marked among workers affected by buyouts than for the economy at large.

Original languageEnglish
Peer-reviewed scientific journalJournal of Labor Economics
Volume35
Issue number3
Pages (from-to)697-754
Number of pages58
ISSN0734-306X
DOIs
Publication statusPublished - 2017
Externally publishedYes
MoE publication typeA1 Journal article - refereed

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