Private Equity Buyouts and Employee Health

Private Equity Buyouts and Employee Health

Ernst Maug, Pilar Garcia-Gomez, Stefan Obernberger

Series number :

Serial Number: 

Date posted :

May 13 2020

Last revised :

November 10 2020
SSRN Share


  • private equity • 
  • buyouts • 
  • restructuring • 
  • Health • 
  • Human Capital Risk • 
  • wages • 
  • Unemployment Insurance

We examine the role of employee health in Private Equity buyouts using employee level data on employment, wages, medical prescriptions, and health expenditures of more than 55,000 buyout employees. Employees with a lower health status before the buyout face the most substantial losses of income and employment from buyouts.

Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts. Buyouts influence employees’ career paths, and health outcomes after buyouts are associated with career-path outcomes: Those who become unemployed are in poorer health and the health of those who find new jobs is better. More than half of the negative effect of buyouts on employees’ incomes is buffered by social transfers and this insurance effect is strongest for employees in poor health. We conclude that buyout-related restructuring has a stronger negative impact on the careers and human capital of employees with health problems.


Real name:
Pilar Garcia-Gomez
Real name:
Stefan Obernberger