Agrawal and Lerner Research: A Study on the Impact of Private Equity Investments on Organized Labor

While the aggregate employment impact of private equity has been carefully examined, the quality of those jobs remains poorly understood. Anecdotally, accounts are plentiful of private equity groups weakening unions, reducing pension benefits, and exacerbating work conditions; but there is little systematic evidence one way or another.

To undertake this analysis, Professors Ashwini Agrawal at the Stern School of Business at NYU and Josh Lerner of Harvard Business School will combine the PCRI database with two other sources of information. The first is data from Department of Labor filings about Unfair Labor Practice complaints (a formal process by which employees can object to anti-union activity or pressure by employers) and about union elections. These data are compiled on the individual establishment levels – i.e., the specific factories, offices, retail outlets and other distinct physical locations where business takes place. The second source will be the Longitudinal Business Database (LBD) at the U.S. Census Bureau, which tracks employment and earnings across the entire nonfarm private sector and contains annual data for about five million firms and six million establishments.

Professors Agrawal and Lerner will look at the events prior to and after private equity purchases, in order to evaluate the impact of private equity on job quality and labor-management relations. This work will enrich our understanding of the impact of private equity investment on the quality of work life in the United States.

1 Steven J. Davis, John Haltiwanger, Kyle Handley, Ron Jarmin, Josh Lerner, and Javier Miranda, “Private Equity, Jobs, and Productivity,” National Bureau of Economic Research working paper no. 19458, 2013.

2 See, for example, Service Employees International Union (SEIU), Behind the Buyouts: Inside the World of Private Equity, Washington: SEIU, 2013