How do wage wars affect employer reputation in a competitive labor market? Evidence from Indeed.com reviews

OA Version
Citation
Abstract
This thesis empirically evaluates the impact of voluntary minimum wage changes to firm reputation using data from the hiring website Indeed.com. As a starting point, I show that when Target and Amazon unilaterally raised their minimum wages, their ratings on Indeed.com improved substantially across multiple dimensions: work-life balance, compensation, job security, management, and culture. Next, I examine the impact of a focal firm voluntarily raising its minimum wage on the ratings of similar firms in proximal locations. Using a differences-in-differences (DiD) design, I present preliminary evidence that competitors that are located near the focal firm may expe- rience a negative reputational shock relative to similar firms that are geographically distant. Additionally, this thesis applies novel sentiment analysis techniques to eval- uate minimum wage policies on review text. Using state-of-the-art NLP models such as Claude, ChatGPT, and RoBERTa, I identify and score two topics that are im- portant to job reviewers, but do not receive star ratings on Indeed.com: ”Scheduling and Hours,” and ”Workload and Compensation.” Finally, I use LLMs to perform zero-shot fine-grained sentiment analysis to investigate how a company’s reputation in regards to these topics is impacted by voluntary minimum wage policies. In these analyses, I am not able to refute the null hypothesis, though the method demostrates promise for further development.
Description
2024
License
Attribution 4.0 International