Minimum Wages and Firm Value

Brian Bell and Stephen Machin

Journal of Labor Economics, 2018, vol. 36, issue 1, 159 - 195

Abstract: How does firm value change in response to a minimum wage hike? This paper exploits the announcement of a big change in the UK minimum wage that was both totally unanticipated and free of uncertainty. The stock market response to this is examined in an event study setting. The analysis uncovers significant falls in the stock market value of low-wage firms. In light of this finding, the paper concludes by discussing magnitudes of response, including longer-term modes of firm adjustment to the cost shock induced by the minimum wage hike.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (49)

Downloads: (external link)
http://dx.doi.org/10.1086/693870 (application/pdf)
http://dx.doi.org/10.1086/693870 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Minimum wages and firm value (2018)
Working Paper: Minimum wages and firm value (2016)
Working Paper: Minimum wages and firm value (2016)
Working Paper: Minimum Wages and Firm Value (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlabec:doi:10.1086/693870

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().