Private Equity, Jobs, and Productivity: A Comment

Abstract

Davis et al. (2014) provide evidence that the impact of leveraged buyouts on employment is quite modest. We challenge this view. We illustrate that the documented job creation is the artifact of deviating from Census data event time and selecting October. Moreover, job destruction is potentially underestimated due to four deviations from established practices: (1) failing to specifically identify leveraged buyouts; (2) including secondary buyouts; (3) testing treated establishments while no longer treated; and (4) failing to consider bankruptcies. Finally, Census data under represents controversial larger public-to-private leveraged buyouts. Nonetheless, we applaud efforts to bring data to these sensitive issues.