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Corporate Share Repurchase Policies and Labor Share

Author

Listed:
  • Xudong Fu
  • Darren Kisgen
  • Lei Kong

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.

Suggested Citation

  • Xudong Fu & Darren Kisgen & Lei Kong, 2025. "Corporate Share Repurchase Policies and Labor Share," Working Papers 25-14, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:25-14
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    File URL: https://www2.census.gov/library/working-papers/2025/adrm/ces/CES-WP-25-14.pdf
    File Function: First version, 2025
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