Working Paper Series
Private Equity, Layoffs, and Job Polarization
() and Joacim Tåg
Abstract: Although private equity firms are often criticized for
layoffs, little evidence exists regarding which employees lose their jobs
and why. We argue that explanations for the job polarization process can
also explain layoffs after buyouts. Buyouts reduce agency problems, which
triggers automation, offshoring, and tougher bargaining with labor unions.
We show that workers in less productive firms who perform routine or
offshorable job tasks are more likely to lose their jobs. The opposite
trend holds for workers who perform non-routine or non-offshorable job
tasks. Moreover, workers who belong to aggressive labor unions are more
likely to lose their jobs.
Keywords: Employment; Job polarization; Labor unions; Private equity buyouts; Leveraged buyouts; Offshoring; Restructuring; ask-biased technological change; Unemployment; (follow links to similar papers)
JEL-Codes: G32; G34; J60; (follow links to similar papers)
57 pages, April 17, 2015
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- This paper is published as:
Olsson, Martin and Joacim Tåg, (2017), 'Private Equity, Layoffs, and Job Polarization', Journal of Labor Economics, Vol. 35, pages 697-754
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