The Review of Economics and Statistics Vol. 107 No. 5 2025

Health Effects of Downsizing Survival

Alexander Ahammer¹; Dominik Grübl²; Rudolf Winter-Ebmer³

¹ Johannes Kepler University Linz and IZA Institute of Labor Economics · ² Johannes Kepler University Linz and Economica Institute of Economic Research · ³ Johannes Kepler University Linz, IZA Institute of Labor Economics, Institute of Advanced Studies Vienna, and CEPR

Abstract

We show that downsizing has substantial negative effects on the health of workers who remain in the firm. We study mass layoff (ML) survivors in Austria, using workers who survive a ML themselves, but a few years in the future, as a control group. Based on high-quality administrative data, we find evidence that downsizing has persistent effects on mental and physical health, and that these effects can be explained by workers fearing for their own jobs. We also show that health effects due to downsizing imply nonnegligible costs for firms.

DOI

10.1162/rest_a_01338

Volume

107

Issue

5

Pages

1388-1405

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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