Research

Local Labor Market Effects of Mergers and Acquisitions in Developing Countries: Evidence from Brazil

Abstract I use matched employer-employee records merged with corporate tax information from 2003 to 2017 to estimate labor market-wide effects of mergers and acquisitions in Brazil. Pairs of commuting zone and industry sector define labor markets. In the following year of a merger, the market size falls by 10.8%. The employment adjustment is concentrated in merging firms. For the firms not involved in M&As, I estimate a 1.07% decline in workers’ earnings and a positive, although not significant, increase in their size. Most mergers have a predicted impact of zero points in concentration, measured by the Herfindahl–Hirschman Index (HHI). In spillover firms, earnings decline similarly for mergers with high and low predicted changes in HHI. Contrary to the recent literature on market concentration in developed economies, I find no evidence of oligopsonistic behavior in Brazilian labor markets. [Full Text]

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Merger Effects on Worker Outcomes: A Review for Antitrust Enforcement

Abstract Empirical findings point to a robust negative relationship between local employment concentration and wages. Despite the scarcity of merger challenges on the grounds of decreased labor market competition, economic theory, case law, and amassed evidence justify the incorporation of labor markets in the scope of antitrust’s scrutiny. This paper provides a comprehensive review of existing literature regarding the impact of mergers on employees and its relevance to antitrust policy. Additionally, it presents a summary of recommendations to antitrust agencies, drawing from the accumulated practice in the enforcement of product market competition. [Full Text]

The Public-Private Wage Gap in Brazil: New Evidence from Linked Employer-Employee Data

Abstract This study leverages 15 years of employer-employee administrative records from Brazil to examine wage differences between public and private sector workers. Using the Oaxaca-Blinder decomposition, I estimate the wage gap on average and across the earnings distribution. My findings confirm that public sector workers typically have higher earnings due to both their observable attributes and the public sector’s distinct wage structure, which significantly varies across government branches and levels. Over the earnings distribution, a consistent wage premium due to public sector compensation rules persists across all earnings deciles when worker fixed effects are included. This implies that horizontal wage freezes, often applied in periods of fiscal consolidation, can effectively reduce the public wage premium. [Full Text]

Work in Progress


Revolving Doors and Public Procurement

with Dimas Fazio (NUS)

More details We explore the relationship between procurement deals within the Brazilian federal government and the contingent of civil service workers switching into private-sector careers. We find preliminary evidence that public sector workers are more likely to work for a private sector firm that has celebrated a contract with their former government divisions. This is suggestive of quid pro quo in the form of career benefits to public sector workers.

Poaching, Raids, and Managerial Compensation

with Thomas Jungbauer (Cornell), Yi Chen (Cornell), Fabian Lange (McGill)

More details Company directors are highly coveted professionals, not only because of their executive skills but also due to their access to a wide range of professionals in their industry. We develop a model where potential employers poach executives taking into account the network of human capital these executives have previously interacted with in their career. We verify the predictions of the model using administrative matched employer-employee records form Brazil.