Journal of Financial and Quantitative Analysis Vol. 60 No. 6 2025

IPOs, Human Capital, and Labor Reallocation

Tania Babina¹; Paige Ouimet²; Rebecca Zarutskie³

¹ University of Maryland, Smith School of Business · ² University of North Carolina at Chapel Hill Kenan-Flagler School of Business · ³ Federal Reserve Bank of Dallas

Abstract

How does access to public equity markets affect the human capital of IPO filing firms? While IPO filing firms have high average wages and limited industrial diversification, a successful IPO increases departures of high-wage employees to startups and triggers industrial diversification through employment growth in non-core industries. Surprisingly, IPOs do not significantly affect the earnings growth of pre-IPO workers. Instead, post-IPO hires receive larger earnings increases upon joining. Overall, going public has a significant effect on a firm’s workforce and labor reallocation across firms.

DOI

10.1017/s0022109024000772

Volume

60

Issue

6

Pages

2584-2614

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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