How Do Mergers Affect the Mental Health of Employees?

56 Pages Posted: 18 Oct 2021 Last revised: 13 Oct 2023

See all articles by Laurent Bach

Laurent Bach

ESSEC Business School - Finance Department; Swedish House of Finance

Ramin Baghai

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

Marieke Bos

Swedish House of Finance - Stockholm School of Economics; Vrije Universiteit Amsterdam; Consumer Finance Institute, Federal Reserve Bank of Philadelphia; Tinbergen Institute

Rui Silva

Nova School of Business and Economics; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: October 3, 2023

Abstract

We study employee mental health as a non-monetary measure of the long-term effects of mergers. Using employer-employee level data linked to individual health records, we document that the incidence of stress, anxiety, depression, and psychiatric medication usage persistently increase following mergers. These effects are prevalent among employees from both targets and acquirers, in weak as well as in growing, profitable firms. Employees who experience negative career developments within the merging firms, "blue-collar" workers, and employees with lower skills are most affected. Mergers that generate more mental illness among employees perform worse post-transaction. A variety of tests address endogeneity concerns.

Keywords: Mergers and Acquisitions, Corporate Restructuring, Mental Health, Mental Illness

JEL Classification: G34, I10, J81, L23

Suggested Citation

Bach, Laurent and Baghai, Ramin and Bos, Marieke and Silva, Rui, How Do Mergers Affect the Mental Health of Employees? (October 3, 2023). Swedish House of Finance Research Paper No. 21-21, European Corporate Governance Institute – Finance Working Paper No. 793/2021, Available at SSRN: https://ssrn.com/abstract=3940462 or http://dx.doi.org/10.2139/ssrn.3940462

Laurent Bach

ESSEC Business School - Finance Department ( email )

Avenue Bernard Hirsch
BP 105 Cergy Cedex, 95021
France

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Ramin Baghai

Stockholm School of Economics ( email )

PO Box 6501
Stockholm, 11383
Sweden

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Marieke Bos (Contact Author)

Swedish House of Finance - Stockholm School of Economics ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

HOME PAGE: http://www.mariekebos.org

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

Consumer Finance Institute, Federal Reserve Bank of Philadelphia ( email )

Ten Independence Mall
Philadelphia, PA 19106-1574
United States

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Rui Silva

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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