The Health Effects of Downsizing Survival

We show that downsizing has substantial negative effects on the health of workers who remain in the firm. We study mass layoff (ML) survivors in Austria, using workers who survive a ML themselves, but a few years in the future, as a control group. Based on high-quality administrative data, we find e...

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Bibliographic Details
Published in:The review of economics and statistics 2023-05, p.1-45
Main Authors: Ahammer, Alexander, Grübl, Dominik, Winter-Ebmer, Rudolf
Format: Article
Language:English
Online Access:Get full text
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Summary:We show that downsizing has substantial negative effects on the health of workers who remain in the firm. We study mass layoff (ML) survivors in Austria, using workers who survive a ML themselves, but a few years in the future, as a control group. Based on high-quality administrative data, we find evidence that downsizing has persistent effects on mental and physical health, and that these effects can be explained by workers fearing for their own jobs. We also show that health effects due to downsizing imply non-negligible costs for firms.
ISSN:0034-6535
1530-9142
DOI:10.1162/rest_a_01338