Mergers and Labor Market Outcomes in the US Airline Industry
38 Pages Posted: 10 Jul 2020 Last revised: 3 Nov 2020
Date Written: November 3, 2020
This paper examines US airline mergers between 1993 and 2018 and studies their impact on the labor market. Our difference-in-differences estimates indicate a significant reduction in the merging airlines' long-term wage and fringe benefits following the mergers. The effect is particularly salient among large-scale mergers involving major airlines and low cost carriers. The results also suggest a negative short-term employment impact of mergers that varies by occupation types. Our findings are consistent with the impact of merger-induced monopsony power discussed in recent literature and offer important policy implications regarding how to account for employer monopsony power during mergers and acquisitions.
Keywords: mergers and acquisitions, wage, employment, airline industry
JEL Classification: L93, G34, J42, K21
Suggested Citation: Suggested Citation