Nonregular Employment and Payout Policy: Evidence from the Massachusetts Independent Contractor Law
利用2004年马萨诸塞州限制独立承包商使用的法律，研究发现该法律导致企业盈利对销售变化更敏感、劳动成本上升、盈利能力下降，进而减少股票回购，尤其对高运营杠杆和财务约束的企业影响更大。
Compared with regular employees, independent contractors (ICs) offer labor flexibility and cost savings to their employers. Using a difference-in-differences design around the 2004 Massachusetts law that discourages IC usage, we find that this exogenous decrease in IC usage makes treated firms’ earnings more sensitive to changes in sales, increases labor-related expenses, and reduces profitability. Firms subsequently reduce share repurchases. The decrease is more pronounced for firms with high operating leverage and financial constraints. Our results are robust to entropy balancing. We conclude that IC usage affects firms’ operating leverage and profitability, which in turn, influence payout policy. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.00103 .