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We relate employees' health to their productivity to analyze the restructuring of the labor force during Private Equity buyouts using employee-level data of 56,000 Dutch buyout employees. Employees with a worse health status before the buyout face the most substantial losses of income and employment. Health characteristics associated with lower wages in the general population are strongly predictive of job loss after buyouts. Consistent with the notion that state-level insurance substitutes for firm-level insurance, more than half of the negative effect of buyouts on employees' incomes is buffered by social transfers, and this buffer is larger for employees in poor health. We find no evidence that buyouts worsen employees' health.

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