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The labor market impacts of employer consolidation: Evidence from Germany

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  • Todd, Kevin
  • Heining, Jörg

Abstract

We use detailed administrative data to study how acquisitions – specifically the acquisition of a plant by a firm with a similar plant in the same local labor market – affect workers. Using an event study framework with a control group of workers at unaffected plants, we find that acquisitions lead to employment losses for workers initially employed at the acquired firm, mainly associated with labor force withdrawals by older female workers. At the same time we find evidence of a rise in wages for workers initially employed at targets and at the acquiring firm who remain with the combined enterprise, concentrated among lower-wage workers. Our findings suggest that consolidations lead to a reduction in overall employment but a rise in rents per worker that lead to a pattern of losers and winners in the labor market.

Suggested Citation

  • Todd, Kevin & Heining, Jörg, 2024. "The labor market impacts of employer consolidation: Evidence from Germany," Labour Economics, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:labeco:v:87:y:2024:i:c:s0927537124000046
    DOI: 10.1016/j.labeco.2024.102508
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    More about this item

    Keywords

    Employment and wage effects; Plant acquisitions; Worker level outcomes;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs

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