How Do Acquisitions Affect the Mental Health of Employees?
76 Pages Posted: 18 Oct 2021 Last revised: 30 Nov 2021
Date Written: October 11, 2021
Using employer-employee level data linked to individual health records, we document that the incidence of stress, anxiety, depression, psychiatric medication usage, and even suicide increase following acquisitions. 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 cognitive and non-cognitive skills are most affected. A variety of tests address endogeneity concerns, including an analysis exploiting failed mergers. Our findings point to mental illness as a significant non-pecuniary cost of acquisitions.
Keywords: Mergers and Acquisitions, Corporate Restructuring, Mental Health, Mental Illness
JEL Classification: G34, I10, J81, L23
Suggested Citation: Suggested Citation