Name
Political Connections and Labor Law violations: Evidence from U.S. Firms
Date & Time
Tuesday, July 7, 2026, 11:55 AM - 12:20 PM
Description
We investigate the relationship between political connections and labor law compliance among U.S. firms. Using a comprehensive dataset of labor law violations and political contributions and lobbying activity, we show that politically connected firms are significantly more likely to commit labor-related offenses. While government contract award and renewal decisions generally act as a key enforcement mechanism of labor laws, this deterrent effect is substantially weakened or undone for politically connected firms, which continue to secure government contracts despite non-compliance. To establish causality, we exploit close elections and exogenous shocks to political ties, showing that the loss of political connections leads to a decline in labor violations.
Speakers
Keywords
Workplace misconduct, Political connections, Lobbying, Government contracts
Theme
CORPORATE FINANCE
Author 1
Emdad Islam
Author 2
Lubna Rahman
Author 3
Blake Loriot
Author 4
Stephan Siegel