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Vortragende Person/Vortragende Personen:
Krista Ruffini (Federal Reserve Bank of Minneapolis)

Higher Wages, Service Quality, and Firm Profitability: Evidence from Nursing Homes and Minimum Wage Reforms

Abstract: This paper examines whether higher earnings for frontline workers affect the quality of services consumers receive. I leverage wage increases in the statutory minimum wage, combined with worker, consumer, and rm outcomes in the nursing home sector. I find that higher minimum wages increase income and tenure for low-wage employees while improving consumer outcomes, measured by fewer inspection violations; lower rates of adverse, preventable health conditions; and lower resident mortality. Firms avoid lower profitability by attracting patients with a greater ability to pay and increasing prices for these consumers.

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