What question did this study set out to answer?

The study investigates how private equity buyouts affect employee health and labor force dynamics.

December 9, 2025

Private Equity Buyouts and Employee Health

PGPilar García‐GómezUniversitat Autònoma de Barcelona EMErnst MaugUniversity of Mannheim SOStefan ObernbergerErasmus University Rotterdam

Key Points

The study investigates how private equity buyouts affect employee health and labor force dynamics.
Analyzed employee-level data of 56,000 Dutch buyout employees.
Examined the relationship between health, job loss, and income post-buyout.
Considered the effects of social transfers on employees' financial stability.
No evidence that buyouts negatively impact employee health.
Job loss is more pronounced in employees with poorer health.
Income loss after buyouts is buffered by social transfers.

Abstract

We examine the role of employee health for the restructuring of the labor force during private equity buyouts using employee-level data of 56,000 Dutch buyout employees. We find no evidence that buyouts have a negative impact on the health of buyout employees. Employees lose income and employment after buyouts, and these losses are far larger for employees in poorer health. The negative effect of buyouts on employees’ incomes is buffered by social transfers, and this buffer is larger for employees in poorer health, who exit the labor market at a much higher rate. Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts. This paper was accepted by David Sraer, finance. Funding: This work was supported by the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation) Projects MA 3317/3-1 and MA 3317/3-2. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01874 .

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