Private Equity and Employees
Using linked employer-employee data from Sweden, a difference-in-difference approach, and 201 private equity buyouts undertaken between 1998 and 2004, we show that unemployment risk declines and labor income increases for employees in the wake of a private equity buyout. Unemployment risk declines despite lower employment growth for continuing establishments – attributable to hiring freezes rather than to layoffs – and a lack of change in firm level employment growth. A plausible explanation is relaxed financial constraints: the effects are strongest in industries dependent on external finance for growth, for non-divisional buyouts, and for buyouts just prior to 2001.
|Date of creation:||26 Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven Davis & John Haltiwanger & Ron Jarmin & Josh Lerner & Javier Miranda, 2008.
"Private Equity and Employment,"
08-07r, Center for Economic Studies, U.S. Census Bureau, revised Oct 2011.
- Steven N. Kaplan & Per Stromberg, 2009.
"Leveraged Buyouts and Private Equity,"
Journal of Economic Perspectives,
American Economic Association, vol. 23(1), pages 121-46, Winter.
- Phillip Leslie & Paul Oyer, 2008. "Managerial Incentives and Value Creation: Evidence from Private Equity," NBER Working Papers 14331, National Bureau of Economic Research, Inc.
- Gregor Andrade & Steven N. Kaplan, 1998.
"How Costly is Financial (Not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed,"
Journal of Finance,
American Finance Association, vol. 53(5), pages 1443-1493, October.
- Gregor Andrade & Steven N. Kaplan, 1997. "How Costly is Financial (not Economic) Distress? Evidence from Highly Leveraged Transactions that Became Distressed," NBER Working Papers 6145, National Bureau of Economic Research, Inc.
- Imbens, Guido W. & Wooldridge, Jeffrey M., 2008.
"Recent Developments in the Econometrics of Program Evaluation,"
IZA Discussion Papers
3640, Institute for the Study of Labor (IZA).
- Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
- Wooldridge, Jeffrey M. & Imbens, Guido, 2009. "Recent Developments in the Econometrics of Program Evaluation," Scholarly Articles 3043416, Harvard University Department of Economics.
- Guido Imbens & Jeffrey Wooldridge, 2008. "Recent developments in the econometrics of program evaluation," CeMMAP working papers CWP24/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
- Guido M. Imbens & Jeffrey M. Wooldridge, 2008. "Recent Developments in the Econometrics of Program Evaluation," NBER Working Papers 14251, National Bureau of Economic Research, Inc.
- Raghuram G. Rajan & Luigi Zingales, 1996.
"Financial Dependence and Growth,"
NBER Working Papers
5758, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Lawrence H. Summers, 1987.
"Breach of Trust in Hostile Takeovers,"
NBER Working Papers
2342, National Bureau of Economic Research, Inc.
- Efraim Benmelech & Nittai K. Bergman & Amit Seru, 2011. "Financing Labor," NBER Working Papers 17144, National Bureau of Economic Research, Inc.
- Mahmood Arai & Peter Skogman Thoursie, 2009. "Renouncing Personal Names: An Empirical Examination of Surname Change and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 27(1), pages 127-147, 01.
- Andrea Caggese & Vicente Cuñat, 2005.
"Financing Constraints and Fixed-Term Employment Contracts,"
266, Barcelona Graduate School of Economics.
- Andrea Caggese & Vicente Cuñat, 2008. "Financing Constraints and Fixed-term Employment Contracts," Economic Journal, Royal Economic Society, vol. 118(533), pages 2013-2046, November.
- Andrea Caggese & Vicente Cuñat, 2006. "Financing constraints and fixed-term employment contracts," Economics Working Papers 1010, Department of Economics and Business, Universitat Pompeu Fabra.
- Frank R. Lichtenberg & Donald Siegel, 1989.
"The Effects of Leveraged Buyouts on Productivity and Related Aspects of Firm Behavior,"
NBER Working Papers
3022, National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R. & Siegel, Donald, 1990. "The effects of leveraged buyouts on productivity and related aspects of firm behavior," Journal of Financial Economics, Elsevier, vol. 27(1), pages 165-194, September.
- Frank R Lichtenberg & Donald Siegel, 1989. "The Effects Of Leveraged Buyouts On Productivity And Related Aspects Of Firm Behavior," Working Papers 89-5, Center for Economic Studies, U.S. Census Bureau.
- Kevin Amess & Mike Wright, 2007. "The Wage and Employment Effects of Leveraged Buyouts in the UK," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(2), pages 179-195.
- Louis S. Jacobson & Robert J. LaLonde & Daniel Sullivan, 1992.
"Earnings Losses of Displaced Workers,"
Upjohn Working Papers and Journal Articles
92-11, W.E. Upjohn Institute for Employment Research.
- David A. Matsa, 2010. "Capital Structure as a Strategic Variable: Evidence from Collective Bargaining," Journal of Finance, American Finance Association, vol. 65(3), pages 1197-1232, 06.
- Marco Pagano & Giovanni Pica, 2011.
"Finance and Employment,"
CSEF Working Papers
283, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
- David E. Card & Pablo Ibarraran & Juan Miguel Villa, 2011.
"Building in an Evaluation Component for Active Labor Market Programs: A Practitioner's Guide,"
SPD Working Papers
1101, Inter-American Development Bank, Office of Strategic Planning and Development Effectiveness (SPD).
- Card, David & Ibarrarán, Pablo & Villa, Juan Miguel, 2011. "Building in an Evaluation Component for Active Labor Market Programs: A Practitioner's Guide," IZA Discussion Papers 6085, Institute for the Study of Labor (IZA).
- Kevin Amess & Mike Wright, 2012. "Leveraged buyouts, private equity and jobs," Small Business Economics, Springer, vol. 38(4), pages 419-430, May.
- Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-84, December.
- DiTella, Rafael & MacCulloch, Robert & Oswald, Andrew J., 2001.
"Preferences over inflation and unemployment: Evidence from surveys of happiness,"
ZEI Working Papers
B 03-2001, ZEI - Center for European Integration Studies, University of Bonn.
- Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
- Boucly, Quentin & Sraer, David & Thesmar, David, 2011. "Growth LBOs," Journal of Financial Economics, Elsevier, vol. 102(2), pages 432-453.
When requesting a correction, please mention this item's handle: RePEc:hhs:iuiwop:0906. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson)
If references are entirely missing, you can add them using this form.