Private Equity and Human Capital Risk

Private Equity and Human Capital Risk

Manfred Antoni, Ernst Maug, Stefan Obernberger

Series number :

Serial Number: 

Date posted :

August 01 2017

Last revised :

November 21 2018
SSRN Share


  • private equity • 
  • restructuring • 
  • Human Capital Risk • 
  • buyouts • 
  • wages

We study the human-capital effects of private equity buyouts in Germany. We conduct matched-sample difference-in-differences estimations at the establishment and at the individual employee level with more than 152,000 buyout employees and a carefully matched control group. Buyouts are followed by a reduction in overall employment and an increase in employee turnover.

Employees of buyout targets experience earnings declines equivalent to 2.8% of median earnings in the fifth year after the buyout. Managers and older employees fare far worse after buyouts compared to the average target employee, even though they are not more likely to lose their jobs at the target compared to other employees. We argue that the employees most negatively affected after buyouts are those who are less likely to find new employment, not those who are most likely to lose their jobs. There is evidence for a reduction in administrative staff and more hiring into jobs that require IT skills.


Real name:
Manfred Antoni
Real name:
Stefan Obernberger