Working Paper No. 1068

Private Equity, Layoffs, and Job Polarization

Published: April 17, 2015Keywords: Employment; Job polarization; Labor unions; Private equity buyouts; Leveraged buyouts; Offshoring; Restructuring; ask-biased technological change; UnemploymentJEL-codes: G32; G34; J60

Private Equity, Layoffs, and Job Polarization Martin Olsson and Joacim Tåg

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.

Martin Olsson


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Joacim Tåg


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Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

Sick of Inequality.jpg

In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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