Downloads
Using rich administrative data from the Netherlands, we study the consequences of firm consolidation for workers. For workers at acquired firms, takeovers are associated with a 8.5% drop in employment at the consolidated firm and a 2.6% drop in total labor income. These effects are persistent even four years later. We show that the primary mechanism for this job loss is labor restructuring at consolidating firms. Specifically, workers with higher-than-expected pay relative to their human capital and workers with skills that are likely already present at acquirers are less likely to be retained.
Authors
Sabien Dobbelaere
Vrije Universiteit Amsterdam

Research Associate World Bank
Daniel is an economist at the World Bank. His research covers topics in public finance, including social insurance, taxation, and inequality.
Grace McCormack
Ph.D. Candidate in Public Policy Harvard
Sándor Sóvágó
Assistant Professor University of Groningen
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.4522
- Publisher
- Institute for Fiscal Studies
Suggested citation
Dobbelaere, S et al. (2022). Firm consolidation and labor market outcomes. 22/45. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/firm-consolidation-and-labor-market-outcomes (accessed: 10 February 2025).
More from IFS
Understand this issue

Do tariffs work?
We discuss the economic consequences of tariffs, why governments use them, and whether they actually achieve their intended goals.
23 January 2025

Minimum wages in the UK – how high can they go?
In the UK today, earnings inequality is substantially higher than it used to be.
30 October 2024

Is Labour's inheritance really worse than expected?
30 July 2024
Policy analysis

Employment rates by local authority, year to June 2024
Almost a third of local authorities in Great Britain already have employment rates of 80%, one in six have employment rates below 70%.
12 December 2024

Employment rates of 15–64-year-olds in OECD countries, 2016 to 2023
There is a sizeable gap between the UK’s employment rate of 75% and the top four countries who have achieved an 80% employment rate.
12 December 2024

Employment rates in the UK and the four frontier countries, by age and gender, 2005 to 2023
The employment rate gaps for 15-24-year-olds and 55-64-year-olds together explain three quarters of the difference in employment rates between the UK.
12 December 2024
Academic research

Firm quality and health maintenance
We estimate the impact of firm quality – primarily measured by firm productivity – on the health maintenance of employees.
18 December 2024

Household responses to trade shocks
We study the impact of Chinese import competition in the 2000s on workers and their households in England and Wales.
12 November 2024

Wage effects of means-tested transfers: Incidence implications of using firms as intermediaries
We show that how countries disburse tax credits matters for economic incidence by exploiting reform to the disbursement of child benefits in Argentina
22 October 2024