Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Lazaro Gamio / Axios

Private equity investors are often criticized for destroying jobs, though the most comprehensive research into their impact on employment found that it was "modest." That's about to change.

Why this matters: Harvard Business School's Josh Lerner says the update to a study on private equity and jobs this time around will definitively show private equity to be a net job creator or job destroyer. He would not tip his hand as to which side of the ledger things now fall.

The issue: Private equity's employment record is difficult to discern, since private companies rarely disclose payroll information to anyone other than tax authorities. But a group of business school professors ― including Harvard's Lerner and the University of Chicago's Steve Davis ― secured access to the U.S. Census Bureau's Longitudinal Business Database, which is derived from IRS records, and then matched those employment records with thousands of private equity transactions that occurred between 1985 and 2005.

They were required to only use the data in the aggregate (i.e., not identify specific transactions), and in 2011 released a working paper that used a control sample of companies not owned by private equity. It found:

  • Private equity has just "a modest net impact on employment ... employment shrinks by less than 1% at target firms relative to controls in the first two years after private equity buyouts."
  • Company demographics have a large impact. Net job losses were higher for retail companies and public companies taken private, while job gains were found for independently-owned companies.
  • Despite the "modest" net results, private equity does create quite a bit of labor turmoil ― firing an above-market number of people in the early days after buying a company, but then also hiring more people in the investment's latter years.

What comes next: Both private equity and the broader labor market have changed a lot since 2005, so the researchers last year decided to update their paper with an extra decade worth of data. It's expected to be released within the next few months.

The fallout: Because private equity executives have regularly used the 2011 paper to push back against "job destroyer" claims, they are inextricably linked to the revision. For better or for worse.

  • For better: Buyout executives will have a giant arrow in their quiver when fighting everything from tax increases to SEC registration requirements to media attacks on their alumni who are running for political office (i.e., the next Romneys).
  • For worse: They'll need to do more than stop complaining about bad PR. They'll have to justify their own existence without looking like hypocrites ― something that could be a tougher trick than turning around a troubled company.

Go deeper

Updated 12 mins ago - Politics & Policy

Senate action on stimulus bill continues as Dems reach deal on jobless aid

Photo: Alex Wong/Getty Images

Democratic leaders struck an agreement with Sen. Joe Manchin (D-W.V.) on emergency unemployment insurance late Friday, clearing the way for Senate action on President Biden's $1.9 trillion stimulus package to resume after an hours-long delay.

The state of play: The Senate will now work through votes on a series of amendments that are expected to last overnight into early Saturday morning.

Capitol review panel recommends more police, mobile fencing

Photo: Olivier Douliery/AFP via Getty Images

A panel appointed by Congress to review security measures at the Capitol is recommending several changes, including mobile fencing and a bigger Capitol police force, to safeguard the area after a riotous mob breached the building on Jan. 6.

Why it matters: Law enforcement officials have warned there could be new plots to attack the area and target lawmakers, including during a speech President Biden is expected to give to a joint session of Congress.

Financial fallout from the Texas deep freeze

Illustration: Annelise Capossela/Axios

Texas has thawed out after an Arctic freeze last month threw the state into a power crisis. But the financial turmoil from power grid shock is just starting to take shape.

Why it matters: In total, electricity companies are billions of dollars short on the post-storm payments they now owe to the state's grid operator. There's no clear path for how they will pay — something being watched closely across the country as extreme weather events become more common.