Private Equity and Workers' Career Paths: The Role of Technological Change

46 Pages Posted: 29 Jun 2013 Last revised: 13 Jun 2016

Ashwini K. Agrawal

London School of Economics & Political Science (LSE)

Prasanna Tambe

New York University (NYU) - Leonard N. Stern School of Business; New York University (NYU) - Department of Information, Operations, and Management Sciences

Date Written: January 7, 2016

Abstract

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.

Keywords: private equity, labor outcomes, IT investment, human capital, unemployment, technology

Suggested Citation

Agrawal, Ashwini K. and Tambe, Prasanna, Private Equity and Workers' Career Paths: The Role of Technological Change (January 7, 2016). Available at SSRN: https://ssrn.com/abstract=2286802 or http://dx.doi.org/10.2139/ssrn.2286802

Ashwini K. Agrawal

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Prasanna Tambe (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
New York, NY NY 10012
United States

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States

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