Private Equity Buyouts and Workplace Safety
Accepted, Review of Financial Studies
63 Pages Posted: 8 Feb 2016 Last revised: 30 Dec 2020
Date Written: December 28, 2020
This paper presents evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly traded U.S. firms. We find that firms experience fewer OSHA safety violations after buyouts and that a larger decline in injury rates is associated with an increased probability of exit via IPO. Employment reductions after buyouts are concentrated in relatively low-injury-risk establishments. Overall, our results suggest that buyouts improve workplace safety and that PE acquirers benefit from this improvement. We explore possible causes of these changes through interviews with executives of companies acquired in buyouts and through cross-sectional analysis.
Keywords: Private equity buyouts, workplace safety, labor and finance
JEL Classification: G32, G34, J28
Suggested Citation: Suggested Citation