Should I stay or should I go? Effects of being acquired on employee outcomes: evidence from Brazil

Joaquín Liwski

No 4740, Asociación Argentina de Economía Política: Working Papers from Asociación Argentina de Economía Política

Abstract: This paper examines the diverse impacts of corporate acquisitions on employees with data from Brazil's formal employment sector (RAIS survey, 2007-2015) and the Thomson Reuters SDC Platinum Database. Employing a matched event studies design, I navigate labor market complexities, revealing heterogeneous effects at individual and firm levels. Notably, the analysis uncovers a significant short-term increase in wages for individuals in acquired firms, particularly in the immediate 0 to 1 years following events; however, separation outcomes predominantly occur in the same year as the acquisition. Job changes play a pivotal role, with incumbents and voluntary leavers experiencing positive outcomes, while involuntary terminations lead to declines, also in the long-run. The study explores age-related, educational, skill-based, and occupational differences, showing diverse impacts across these dimensions. Additionally, firm size emerges as a critical factor, influencing wages and separation outcomes. Ultimately, the change in firm productivity or firm-specific wage premiums drives observed effects, underlining one mechanism of M&A impacts on the workforce.

JEL-codes: J3 J6 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-11
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Working Paper: Should I stay or should I go? Effects of being acquired on employee outcomes: evidence from Brazil (2023)
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