Job Transitions and Employee Earnings after Acquisitions: Linking Corporate and Worker Outcomes

Abstract This paper connects changes in employer characteristics through job transitions to employee earnings following mergers and acquisitions. Using firm balance sheet data linked to individual earnings data in Canada and a matched difference-in-differences design, we find that earnings of workers at target firms decrease after M&As relative to control workers, largely driven by those who move to other firms. Workers leaving targets move to larger and more profitable firms, but still experience wage declines. These decreased earnings are also concentrated among workers with longer tenure. These results are consistent with workers losing valuable match-specific premia after M&A-induced job transitions.