Corporate Share Repurchase Policies and Labor Share
Corporate Share Repurchase Policies and Labor Share
Working Paper Number: CES-25-14
Abstract
Using census data, we investigate whether share repurchases are responsible for the fall in labor share in U.S. corporations. Recent legislation imposes taxes on share repurchases, motivated by the assertion that share repurchases have led to reduced labor payments. Using several empirical approaches, we find no evidence that increases in share repurchases contribute to decreases in labor share. Top share repurchasing firms since 1982 did not decrease labor share. We also rely on exogenous changes in share repurchases around EPS announcements to pinpoint causality. Policies aimed at improving labor share by discouraging share repurchases will likely not achieve their objectives.
Others in Series
Working Paper
Leveraged Payouts: How Using New Debt to Pay Returns in Private Equity Affects Firms, Employees, Creditors, and Investors
We show how a large increase in leverage affects bankruptcy risk and real outcomes, focusing on the setting of dividend recaps in private equity.
Working Paper
The Design of Sampling Strata for the National Household Food Acquisition and Purchase Survey
We produce a stratified sampling frame for the FoodAPS survey by applying Random Forest classifiers to administrative and survey data.
Working Paper
The Intangible Divide: Why Do So Few Firms Invest in Innovation?
R&D and software investment are dominated by a few hundred firms; most firms invest nothing. Why? One factor: rivals’ technology reduces innovation incentives.
Page Last Revised - February 14, 2025