Working Paper: NBER ID: w27788
Authors: Benjamin Bennett; Isil Erel; La H Stern; Zexi Wang
Abstract: We explore how lowering labor market frictions for female workers affects corporate performance. Using the staggered adoption of state-level Paid Family Leave acts, we provide causal evidence on the value created by relieving frictions to accessing female talent, for private and public firms. Reduced turnover and an increase in female leadership are potential mechanisms that contribute to performance gains. Across specifications, our estimates indicate that treated establishments’ productivity increases by about 5% relative to neighbor control establishments. The treatment effect is larger when workers are in less religious counties and in those with more women of childbearing age.
Keywords: Paid Family Leave; Firm Performance; Labor Market Frictions; Female Leadership
JEL Codes: J16; J22; J24; J32; J78; M14; M51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| PFL laws (K36) | firm performance (L25) |
| PFL laws (K36) | return on assets (ROA) (G31) |
| PFL laws (K36) | reduced employee turnover (M51) |
| PFL laws (K36) | increase in female leadership positions (J16) |