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How Do Acquisitions Affect the Mental Health of Employees?

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  • Silva, Rui
  • ,
  • Baghai, Ramin
  • Bos, Marieke

Abstract

Using employer-employee level data linked to individual health records, we document that the incidence of stress, anxiety, depression, psychiatric medication usage, and even suicide increase following acquisitions. These effects are prevalent among employees from both targets and acquirers, in weak as well as in growing, profitable firms. Employees who experience negative career developments within the merging firms, 'blue-collar' workers, and employees with lower cognitive and non-cognitive skills are most affected. A variety of tests address endogeneity concerns, including an analysis exploiting failed mergers. Our findings point to mental illness as a significant non-pecuniary cost of acquisitions.

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  • Silva, Rui & , & Baghai, Ramin & Bos, Marieke, 2021. "How Do Acquisitions Affect the Mental Health of Employees?," CEPR Discussion Papers 16657, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16657
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    References listed on IDEAS

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    Cited by:

    1. Andres, Christian & Bazhutov, Dmitry & Cumming, Douglas J. & Limbach, Peter, 2021. "Does Speculative News Hurt Productivity? Evidence from Takeover Rumors," CFR Working Papers 21-02, University of Cologne, Centre for Financial Research (CFR), revised 2021.

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    More about this item

    Keywords

    Mergers and acquisitions; Corporate restructuring; Mental health; Mental illness;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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