Working Paper: CEPR ID: DP16657
Authors: Laurent Bach; Ramin Baghai; Marieke Bos; Rui Silva
Abstract: 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.
Keywords: mergers and acquisitions; corporate restructuring; mental health; mental illness
JEL Codes: G34; I10; J81; L23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Acquisitions (G34) | Increased levels of stress (I31) |
| Acquisitions (G34) | Increased levels of anxiety (E71) |
| Acquisitions (G34) | Increased levels of depression (I12) |
| Acquisitions (G34) | Increased psychiatric medication usage (I12) |
| Acquisitions (G34) | Increased outpatient care access (I11) |
| Acquisitions (G34) | Increased likelihood of hospital patients (I11) |
| Acquisitions (G34) | Increased mortality risk (I12) |
| Acquisitions (G34) | Increased suicide risk (I12) |
| Acquisitions (G34) | Deterioration in mental health outcomes (I12) |
| Economic distress (H84) | Mental health outcomes (I12) |