Private Equity Buyouts and Workplace Safety

The paper presented in this ZEW Research Seminar showcases evidence of a large, persistent decline in establishment-level workplace injury rates after private equity (PE) buyouts of publicly-traded U.S. firms. The steepness of the decline increases with proxies for pre-buyout short-termism and is unrelated to changes in governance or exposure to automation and outsourcing. Firms also experience declines in safety inspection violations after buyouts. Firms that reduce injury rate post-buyout more are more likely to exit via an IPO. Finally, we find that higher-injury risk establishments reduce employment less post-buyout than lower-injury risk establishments.