Private equity buyouts and employee health

García-Gómez, Pilar ; Maug, Ernst ; Obernberger, Stefan

Document Type: Working paper
Year of publication: 2020
The title of a journal, publication series: ECGI Working Paper Series in Finance
Volume: 680/2020
Place of publication: Brussels
Publishing house: European Corporate Governance Institute (ECGI)
Publication language: English
Institution: Business School > ABWL u. Corporate Finance (Maug 2006-)
Subject: 330 Economics
650 Management
Classification: JEL: G30 , G34 , I12 , J65 , J24 , J31 , M51,
Keywords (English): Private Equity , Buyouts , Restructuring , Health , Human Capital Risk , Wages , Unemployment Insurance
Abstract: We examine the role of employee health in Private Equity buyouts using employee level data on employment, wages, medical prescriptions, and health expenditures of more than 55,000 buyout employees. Employees with a lower health status before the buyout face the most substantial losses of income and employment from buyouts. Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts. Buyouts influence employees’ career paths, and health outcomes after buyouts are asso- ciated with career-path outcomes: Those who become unemployed are in poorer health and the health of those who find new jobs is better. More than half of the negative effect of buyouts on employees’ incomes is buffered by social transfers and this insurance effect is strongest for employees in poor health. We conclude that buyout-related restructuring has a stronger negative impact on the careers and human capital of employees with health problems.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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