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Are foreign private equity buyouts bad for workers?

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  • Olsson, Martin
  • Tåg, Joacim

Abstract

The media often cast foreign private equity firms as villains who gamble with local jobs. We use detailed registry data from Sweden to show that foreign buyouts have not affected workers’ labor market outcomes. But domestic buyouts have. They have increased unemployment incidence by a fifth, duration by a third, and lowered labor income by seven percent.

Suggested Citation

  • Olsson, Martin & Tåg, Joacim, 2018. "Are foreign private equity buyouts bad for workers?," Economics Letters, Elsevier, vol. 172(C), pages 1-4.
    • Handle: RePEc:eee:ecolet:v:172:y:2018:i:c:p:1-4
    DOI: 10.1016/j.econlet.2018.08.002
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    1. Martin Olsson & Joacim Tåg, 2017. "Private Equity, Layoffs, and Job Polarization," Journal of Labor Economics, University of Chicago Press, vol. 35(3), pages 697-754.
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    Cited by:

    1. Olsson, Martin & Tåg, Joacim, 2023. "From Wall Street to Work Floor: How Private Equity Buyouts Affect Workers," Working Paper Series 1475, Research Institute of Industrial Economics.
    2. Gardberg, Malin & Heyman, Fredrik & Tåg, Joacim, 2023. "Importing Automation and Wage Inequality through Foreign Acquisitions," Working Paper Series 1457, Research Institute of Industrial Economics.

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    More about this item

    Keywords

    Buyouts; Cross-border; Employment; Foreign; LBOs; Private equity; Workers;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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