DP16657 How Do Acquisitions Affect the Mental Health of Employees?
|Author(s):||Laurent Bach, Ramin P. Baghai, Marieke Bos, Rui C Silva|
|Publication Date:||October 2021|
|Keyword(s):||Corporate Restructuring, mental health, Mental Illness, mergers and acquisitions|
|JEL(s):||G34, I10, J81, L23|
|Programme Areas:||Labour Economics, Financial Economics, Organizational Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16657|
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.