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Using rich administrative data from the Netherlands, we study the consequences of firm consolidation for workers. For workers at acquired firms, takeovers are associated with a 8.5% drop in employment at the consolidated firm and a 2.6% drop in total labor income. These effects are persistent even four years later. We show that the primary mechanism for this job loss is labor restructuring at consolidating firms. Specifically, workers with higher-than-expected pay relative to their human capital and workers with skills that are likely already present at acquirers are less likely to be retained.
Authors
Sabien Dobbelaere
Vrije Universiteit Amsterdam
Research Associate World Bank
Daniel is an economist at the World Bank. His research covers topics in public finance, including social insurance, taxation, and inequality.
Grace McCormack
Ph.D. Candidate in Public Policy Harvard
Sándor Sóvágó
Assistant Professor University of Groningen
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.4522
- Publisher
- Institute for Fiscal Studies
Suggested citation
Dobbelaere, S et al. (2022). Firm consolidation and labor market outcomes. 22/45. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/firm-consolidation-and-labor-market-outcomes (accessed: 9 May 2024).
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