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Health Effects of Downsizing Survival

Author

Listed:
  • Alexander Ahammer

    (Johannes Kepler University Linz and IZA Institute of Labor Economics)

  • Dominik Grübl

    (Johannes Kepler University Linz and Economica Institute of Economic Research)

  • Rudolf Winter-Ebmer

    (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.

Suggested Citation

  • Alexander Ahammer & Dominik Grübl & Rudolf Winter-Ebmer, 2025. "Health Effects of Downsizing Survival," The Review of Economics and Statistics, MIT Press, vol. 107(5), pages 1388-1405, September.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:5:p:1388-1405
    DOI: 10.1162/rest_a_01338
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    Cited by:

    1. Yaming Cao & Björn Fischer-Weckemann & Johannes Geyer & Nicolas Ziebarth, 2026. "Fundamentally Reforming the DI System: Evidence from Germany," Discussion Papers of DIW Berlin 2157, DIW Berlin, German Institute for Economic Research.

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