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Giacomo Marcolin: "The Effects of Pregnancy-Discrimination Laws: The Case of the Pregnancy Discrimination Act of 1978"

Abstract: Pregnancy discrimination is a common form of discrimination faced by women in the labor force. Nonetheless, before the Pregnancy Discrimination Act (PDA) of 1978, it was not forbidden by existing federal anti-discrimination laws: firms who provided job-protected sick-leave to male workers, often fired their female counterparts upon pregnancy. However, the effects of the employment protection component of the PDA have not yet been studied. In this paper, we first calibrate a matching model to find that (1) the effect of the legislation on employment is unambiguously negative unless it significantly raises the firing costs for discriminating employers, (2) conditional on being strongly implemented, the law could increase women's employment, but only if the degree of discrimination is not too high. We then examine the actual effects of the PDA empirically exploiting quasi-experimental variation, granted by US states' staggered enactment of similar policies. Difference-in-differences types of analyses, based on individual-level survey data, show that the PDA had negative effects on employment of fertile-age women. Evidence of null effects on proxies of job dismissals suggests that the PDA was not effective in sufficiently raising costs of firing discrimination. We finally document a muted response of women's wages, likely due to prior equal pay legislation. This may have exacerbated the negative effect on employment, limiting one margin of adjustment.