Private Equity, Layoffs, and Job Polarization

Martin Olsson and Joacim Tåg

No 906, Working Paper Series from Research Institute of Industrial Economics

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 offshoring. 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 perform routine or offshorable job tasks. Job polarization is also much more marked among workers affected by buyouts than for the economy at large.

Keywords: Automation; Employment; Globalization; Job polarization; Private equity buyouts; Leveraged buyouts; Offshoring; Restructuring; Task-Biased technological Change; Unemployment (search for similar items in EconPapers)
JEL-codes: G32 G34 J50 J60 M51 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-03-26, Revised 2016-05-01
New Economics Papers: this item is included in nep-cfn and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp906.pdf (application/pdf)

Related works:
Journal Article: Private Equity, Layoffs, and Job Polarization (2017)
Working Paper: Private Equity, Layoffs, and Job Polarization (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0906

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().