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Essays on Labor and Finance

Chunyu, L. (2023). Essays on Labor and Finance. (Unpublished Doctoral thesis, City, University of London)


This dissertation includes three essays on labor and finance.

The first chapter (joint with Paolo Volpin and Xingchen Zhu) exploits the staggered implementation of state-level paid sick leave (PSL) mandates to assess their real effects on U.S. corporations. We find that better access to sick pay leads to higher labor productivity and firm profitability. The effects are more pronounced for firms with more expensive labor force, indicating that employees who value sick pay benefits have high human capital. Performance improvements concentrate in industries that require more physical presence in the workplace, which suggests that PSL generates a positive health externality, and in counties with higher social capital, where the risk of absenteeism may be less severe.

Chapter 2 (joint with Xingchen Zhu) studies the impact of improving workers’ reemployment prospects in case of layoffs on firms’ financing decisions. We exploit the staggered adoption of state-level Worker Adjustment and Retraining Notification (mini-WARN) Act which mandates employers to notify affected workers of planned mass layoffs in advance and allows workers to seek alternative employment or necessary training while employed. By promoting workers’ employability after dismissal, we show that mini-WARN leads to an around 1% increase in leverage. The increase concentrates in industries that require more specific job skills and among firms that operate in more opaque environments. A less monopsonistic labor market makes the positive impact on leverage more pronounced, and a slack labor market renders the effect weaker.

In Chapter 3, I examine whether labor restructuring is an important consideration in making acquisition decisions using U.S. interstate variations in the Worker Adjustment and Retraining Notification Act (WARN Act). I show that the staggered introduction of this labor layoff laws has a negative impact both on the aggregated number and value of acquisition activities and on the acquirer’s announcement returns. The decrease in acquirer returns is only due to lower combined synergies, rather than wealth transferred to the target’s shareholders from the acquirer’s shareholders. I also find that the labor restructuring activities are more likely to occur in target companies and the adoption of Mini WARN Acts in acquirer headquarters state has no impact on acquisition activities. Overall, my paper suggests that labor restructuring is an important source of acquisition operating synergies.

Publication Type: Thesis (Doctoral)
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
H Social Sciences > HG Finance
Departments: Bayes Business School
Bayes Business School > Bayes Business School Doctoral Theses
Doctoral Theses
[thumbnail of Chunyu thesis 2023.pdf] Text - Accepted Version
This document is not freely accessible until 31 July 2026 due to copyright restrictions.


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