Scandinavian Working Papers in Economics
Working Paper Series,
Research Institute of Industrial Economics
No 1068: Private Equity, Layoffs, and Job Polarization
Martin Olsson () and Joacim Tåg ()
Additional contact information
Martin Olsson: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Joacim Tåg: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
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
57 pages, April 17, 2015
Full text files
wp1068.pdf
- Published as
- Martin Olsson and Joacim Tåg, (2017), 'Private Equity, Layoffs, and Job Polarization', Journal of Labor Economics, vol 35, pages 697-754
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