A Retrospective Analysis of the Acquisition of Target's Pharmacy Business by CVS Health: Labor Market Perspective

44 Pages Posted: 1 Dec 2023 Last revised: 19 Apr 2024

See all articles by Chris Compton

Chris Compton

Lightcast

Enas Farag

Cairo University - Faculty of Economics & Political Science

Marshall Steinbaum

University of Utah Department of Economics

Date Written: April 18, 2024

Abstract

We analyze the labor market impact of the acquisition of Target's pharmacy business by CVS Health in December 2015, using job posting data from Lightcast. Employing difference-in-differences and event study specifications with treatment assigned by geography, we find that the acquisition reduced pay in affected labor markets by 5.5% in our preferred specification. We test for heterogeneous merger effects by occupational pay rank and by outward occupational mobility. Lower-pay and lower-mobility occupations exhibit more pronounced negative effects from the merger.

Keywords: Labor market monopsony, merger retrospective analysis, difference-in-differences regression, retail pharmacy

JEL Classification: G34, I11, J24, J31, J42, R32

Suggested Citation

Compton, Chris and Farag, Enas and Steinbaum, Marshall, A Retrospective Analysis of the Acquisition of Target's Pharmacy Business by CVS Health: Labor Market Perspective (April 18, 2024). Available at SSRN: https://ssrn.com/abstract=4644895 or http://dx.doi.org/10.2139/ssrn.4644895

Chris Compton

Lightcast ( email )

66 Long Wharf
Boston, MA 02110
United States

Enas Farag (Contact Author)

Cairo University - Faculty of Economics & Political Science ( email )

Cairo University
Giza, Giza
Egypt
+201117149127 (Phone)

HOME PAGE: http://linkedin.com/in/enas-farag-6100b8131

Marshall Steinbaum

University of Utah Department of Economics ( email )

1645 Central Campus Dr.
Salt Lake City, UT 84112
United States

HOME PAGE: http://https://faculty.utah.edu/u6024209-Marshall_Steinbaum/hm/index.hml

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