Leveraged Buyouts: Their Impact On Jobs and Wages

Amess, Kevin

Abstract

The impact of buyouts on jobs and wages has been a controversial issue for a number of years, especially those deals that have private equity backing. As the quote above illustrates, there are concerns that investors in buyouts gain at the expense of employees’ jobs and wages. This chapter outlines agency and entrepreneurial perspectives of buyouts and their predictions regarding the impact of buyouts on jobs and wages. Evidence on the impact of buyouts on jobs and wages is then reviewed and is discussed in relation to the different theoretical perspectives of buyouts. The evidence reviewed here are large scale studies that use a variety of statistical techniques to analyse data from a variety of countries. Studies examining the average impact on jobs and wages are mixed and the magnitude of the impacts are generally fairly modest. There is some evidence consistent with entrepreneurially motivated buyouts creating jobs. Recent employee-level evidence is most insightful, suggesting low-skilled workers are more likely to suffer job losses and high-skilled workers are more likely to experience wage gains. Several areas for future research are identified in this chapter.

Citation

Amess, K. (2018). Leveraged Buyouts: Their Impact On Jobs and Wages. In The Routledge Companion to Management Buyouts (492-507). Routledge

• Acceptance Date: Nov 7, 2017
• Online Publication Date: Sep 3, 2018
• Publication Date: Sep 3, 2018
• Deposit Date: Jan 22, 2019
• Publicly Available Date: Mar 4, 2020
• Publisher: Routledge
• Pages: 492-507
• Book Title: The Routledge Companion to Management Buyouts
• Chapter Number: 26
• ISBN: 9781138713840
• Public URL: https://nottingham-repository.worktribe.com/output/1486560
• Related Public URLs: https://www.crcpress.com/The-Routledge-Companion-to-Management-Buyouts/Wright-Amess-Bacon-Siegel/p/book/9781138713840
• Contract Date: Jan 22, 2019