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How Do Acquisitions Affect the Mental Health of Employees?

Author

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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.

Suggested Citation

  • 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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    Cited by:

    1. is not listed on IDEAS
    2. Andres, Christian & Bazhutov, Dmitry & Cumming, Douglas J. & Limbach, Peter, 2023. "Does speculative news hurt productivity? Evidence from takeover rumors," CFS Working Paper Series 701, Center for Financial Studies (CFS).

    More about this item

    Keywords

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    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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