How Do Acquisitions Affect the Mental Health of Employees?

Using employer-employee level data linked to individual health records, we document that the incidence of stress, anxiety, depression, psychiatric medication usage, and even suicide increase following acquisitions. These effects are prevalent among employees from both targets acquirers, in weak as well growing, profitable firms. Employees who experience negative career developments within merging firms, ’blue-collar’ workers, with lower cognitive non-cognitive skills most affected. A variety tests address endogeneity concerns, including an analysis exploiting failed mergers. Our findings point mental illness a significant non-pecuniary cost