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IPOs, Human Capital, and Labor Reallocation

Author

Listed:
  • Babina, Tania
  • Ouimet, Paige
  • Zarutskie, Rebecca

Abstract

How does access to public equity markets affect the human capital of IPO filing firms? While IPO filing firms have high average wages and limited industrial diversification, a successful IPO increases departures of high-wage employees to startups and triggers industrial diversification through employment growth in non-core industries. Surprisingly, IPOs do not significantly affect the earnings growth of pre-IPO workers. Instead, post-IPO hires receive larger earnings increases upon joining. Overall, going public has a significant effect on a firm’s workforce and labor reallocation across firms.

Suggested Citation

  • Babina, Tania & Ouimet, Paige & Zarutskie, Rebecca, 2025. "IPOs, Human Capital, and Labor Reallocation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 60(6), pages 2584-2614, September.
    • Handle: RePEc:cup:jfinqa:v:60:y:2025:i:6:p:2584-2614_1
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