Higher Minimum Wages Reduce Capital Expenditures

• 成果类型: Article
• 署名作者: Gustafson, Matthew T.; Kotter, Jason D.
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Brigham Young University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4430
• 发表日期: 2023
• 页码: 2933-2953
• 关键词: corporate; INVESTMENT; GOVERNMENT; regulations

摘要

Using cross-state and intertemporal variation in whether a state???s minimum wage is bound by the federal minimum wage, we provide evidence that minimum wage increases lead U.S. public firms in minimum-wage-sensitive industries (i.e., retail, restaurant, and entertainment) to cut capital expenditures. These effects are concentrated one to two years after the law goes into effect. Prior to the minimum wage increase, investment trends are similar across minimum-wage-sensitive firms in bound versus unbound states, and we find little evidence that minimum wage changes affect U.S. public firm investment outside of these industries.