The Labor Market Impacts of Employer Consolidation: Evidence from Germany

Abstract

"We use detailed administrative data to study how acquisitions - specifically the acquisition of a plant by a firm with a similar plant in the same local labor market - affect workers. Using an event study framework with a control group of workers at unaffected plants, we find that acquisitions lead to employment losses for workers initially employed at the acquired (or “target”) firm, associated with labor force withdrawals by older female workers. At the same time we find evidence of a rise in wages for workers initially employed at targets and at the acquiring (or “buyer”) firm who remain with the combined enterprise, concentrated among lower-wage workers. We interpret these findings as suggesting that consolidations lead to a reduction in overall employment but a rise in rents per worker that lead to a pattern of losers and winners in the labor market." (Author's abstract, IAB-Doku) ((en))

Cite article

Kevin, T. & Heining, J. (2020): The Labor Market Impacts of Employer Consolidation: Evidence from Germany. (IAB-Discussion Paper 20/2020), Nürnberg, 57 p.