The health externalities of downsizing

Ahammer, Alexander; Grübl, Dominik and Winter-Ebmer, RudolfORCID: (December 2020) The health externalities of downsizing. IHS Working Paper Series 26, 48 p.

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We show that downsizing has substantial externalities on the health of workers who remain in the firm. To this end, 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 highquality 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 externalities due to downsizing imply non-negligible cost for firms, and that wage cuts may have similar effects.

Item Type: IHS Series
Keywords: Downsizing, mass layoffs, health, job insecurity
Funders: Christian Doppler Laboratory on Aging, Health and the Labor Market, FWF
Classification Codes (e.g. JEL): J63, I12, J23
Research Units: IHS general publications
Date Deposited: 07 Jan 2021 12:55
Last Modified: 14 Jun 2024 11:01

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