Private Equity, Layoffs, and Job Polarization

Martin Olsson and Joacim Tåg

No 1068, Working Paper Series from Research Institute of Industrial Economics

Abstract: Although private equity firms are often criticized for layoffs, little evidence exists regarding which employees lose their jobs and why. We argue that explanations for the job polarization process can also explain layoffs after buyouts. Buyouts reduce agency problems, which triggers automation, offshoring, and tougher bargaining with labor unions. We show that workers in less productive firms who perform routine or offshorable job tasks are more likely to lose their jobs. The opposite trend holds for workers who perform non-routine or non-offshorable job tasks. Moreover, workers who belong to aggressive labor unions are more likely to lose their jobs.

Keywords: Employment; Job polarization; Labor unions; Private equity buyouts; Leveraged buyouts; Offshoring; Restructuring; ask-biased technological change; Unemployment (search for similar items in EconPapers)
JEL-codes: G32 G34 J60 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2015-04-17
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Olsson, Martin and Joacim Tåg, 'Private Equity, Layoffs, and Job Polarization' in Journal of Labor Economics, 2017, pages 697-754.

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Related works:
Journal Article: Private Equity, Layoffs, and Job Polarization (2017)
Working Paper: Private Equity, Layoffs, and Job Polarization (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1068

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