Private Equity and Workers' Career Paths: The Role of Technological Change
Ashwini K. Agrawal
London School of Economics & Political Science (LSE)
New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences
January 7, 2016
We analyze a new dataset on workers’ career paths to examine whether private equity (PE) investments can have positive spillover effects on workers. We study leveraged buyouts in the context of recent information technology (IT) diffusion, and find evidence supporting the argument that many employees of companies acquired by PE investors gain transferable, IT-complementary human capital. Our estimates indicate that these workers experience increases in both long-run employability and wages relative to what they would have realized in the absence of PE investment. The findings underscore PE’s role in mitigating the effects of workforce skill obsolescence due to technological change.
Number of Pages in PDF File: 46
Keywords: private equity, labor outcomes, IT investment, human capital, unemployment, technology
Date posted: June 29, 2013 ; Last revised: June 13, 2016
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