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Firm Consolidation and Labor Market Outcomes

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  • Dobbelaere,Sabien
  • McCormack,Grace
  • Prinz,Daniel
  • Sóvágó,Sándor

Abstract

Using rich administrative data from the Netherlands, this paper studies the consequences of firmconsolidation for workers. For workers at acquired firms, takeovers are associated with an 8.5 percent drop inemployment at the consolidated firm and a 2.6 percent drop in total labor income. These effects are persistent evenfour years later. The paper shows that the primary mechanism for this job loss is labor restructuring at consolidatingfirms. Workers with higher-than-expected pay relative to their human capital and workers with skills that are likelyalready present at acquirers are less likely to be retained.

Suggested Citation

  • Dobbelaere,Sabien & McCormack,Grace & Prinz,Daniel & Sóvágó,Sándor, 2023. "Firm Consolidation and Labor Market Outcomes," Policy Research Working Paper Series 10477, The World Bank.
    • Handle: RePEc:wbk:wbrwps:10477
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