83 Pages Posted: 2 Jul 2014
Date Written: April 24, 2014
Private equity critics claim that leveraged buyouts bring huge job losses and few gains in operating performance. To evaluate these claims, we construct and analyze a new dataset that covers U.S. buyouts from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing to controls defined by industry, size, age, and prior growth. Buyouts lead to modest net job losses but large increases in gross job creation and destruction. Buyouts also bring TFP gains at target firms, mainly through accelerated exit of less productive establishments and greater entry of highly productive ones.
Suggested Citation: Suggested Citation
Davis, Steven J. and Haltiwanger, John and Handley, Kyle and Jarmin, Ron S. and Lerner, Josh and Miranda, Javier, Private Equity, Jobs, and Productivity (April 24, 2014). Chicago Booth Research Paper No. 14-16. Available at SSRN: https://ssrn.com/abstract=2460790