Firm Restructuring and Worker Outcomes: Evidence from Branch Tra nsfers in Italy”
Abstra ct:
We study the labor m arket consequences of firm restructuring using branch transfers (cessioni d i ramo d'azienda) recorded in Italian administrative data over 2005-2023. U nder Italian law, when a firm transfers a business unit to another entity, affected workers follow the branch under the same contractual terms - creat ing a sharp, identifiable reallocation event that we can trace in employer- employee records linked to firm balance sheets. Using a matched event-study design, we examine outcomes for workers transferred to the receiving firm (leavers) and workers who remain at the origin firm (stayers). We find nega tive, persistent earnings losses for leavers, driven primarily by transitio ns to non-employment. Strikingly, stayers experience even larger losses des pite remaining at the same employer - suggesting that restructuring erodes the value of ongoing employment relationships beyond what the direct reallo cation of workers would imply. Effects are highly heterogeneous: transfers between unrelated firms resemble the "fissured workplace" pattern of exclud ing workers from rents, while within-group reorganizations are relatively b enign, and there is substantial variation across industries. Leaver and sta yer effects at the same event are positively correlated, consistent with re structuring operating as a joint shock. Our results reveal that the costs o f firm restructuring extend well beyond the directly transferred workers. DTSTAMP:20260414T180425Z DTSTART:20260416T163000Z DTEND:20260416T180000Z SEQUENCE:0 TRANSP:OPAQUE END:VEVENT END:VCALENDAR