Political Attitudes and Equity Market Reactions to Vaccine Mandate Bans

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

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Paper Title: Political Attitudes and Equity Market Reactions to Vaccine Mandate Bans

Speaker: Yihui Pan, Associate Professor of Finance

Time and Date: 12 – 1 pm, Wednesday 7 June 2023 (AEST)

Venue: Face-to-face seminar in room CB08.08.02, Level 8, Building 8, University of Technology Sydney, 14-28 Ultimo Rd, Ultimo, Sydney, Australia (Map of campus)

Abstract and paper:  In 2021, many firms began considering and implementing vaccine mandates as a means to return workers to in-person work. In response, twelve states enacted laws banning employer COVID-19 vaccine mandates. We study equity market reactions to these bans and find a 0.64 percentage point increase in cumulative abnormal returns to affected firms over a three-day window when the bans are signed into law, compared to unaffected firms. The positive market reaction concentrates in firms in Republican-leaning counties, especially if they face a tight local labor market, and in firms with Democratic leadership but Republican workforce. Overall, our findings highlight the importance of workers’ non-monetary preferences on labor-related outcomes and suggest that regulations aligned with workers’ preferences could relieve firms from potential labor adjustment costs. Link to paper. 

 

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