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Workers, Unions, and Takeovers

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  • Xiaoyang Li

Abstract

How do takeovers affect workers’ wages and job security in the short-run? What role does the labor union play in mitigating these effects? I answer these two questions by analyzing wage and employment outcomes of over 4,000 public firms that were acquired between 1981 and 2002, using establishment-level data from the U.S. Census Bureau. I find that target establishments exhibit a net contraction in wages and employment, relative to comparable establishments after takeovers. Targets’ establishments in more unionized industries experience worse wage and employment outcomes after takeovers. These adverse effects are exacerbated when the establishment is located in a state with Right-to-work laws where unions face a less favorable bargaining environment. These findings indicate that target firms’ employees are negatively affected by takeovers and that their labor unions do not mitigate these negative effects. Copyright Springer Science+Business Media, LLC 2012

Suggested Citation

  • Xiaoyang Li, 2012. "Workers, Unions, and Takeovers," Journal of Labor Research, Springer, vol. 33(4), pages 443-460, December.
    • Handle: RePEc:spr:jlabre:v:33:y:2012:i:4:p:443-460
    DOI: 10.1007/s12122-012-9142-0
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    Cited by:

    1. Ahmad, Muhammad Farooq & Lambert, Thomas, 2019. "Collective bargaining and mergers and acquisitions activity around the world," Journal of Banking & Finance, Elsevier, vol. 99(C), pages 21-44.

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