Description:

Speaker: Giacomo Marcolin

Title: The Role of Pregnancy in Gender Discrimination: Evidence from the Pregnancy Discrimination Act of 1978

Abstract: Gender discrimination remains a persistent issue in labor markets and identifying its underlying drivers is crucial to guide policy solutions. Fertility-related concerns are a clear candidate, but isolating their role is hindered by the fact that pregnancy discrimination is typically addressed by broader gender-discrimination policies. However, this was not the case before the passage of the Pregnancy Discrimination Act (PDA) of 1978: employers could not discriminate on the basis of gender due to existing federal laws, but could legally dismiss workers if pregnant. In this paper, we first calibrate a matching model to find that (i) the effect of the legislation on employment is unambiguously negative unless it significantly raises the firing costs for discriminating employers, (ii) 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 and hiring 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. These findings suggest that fertility is a key driver of discrimination. We finally document that pre-existing equal pay legislation shaped the effects of the PDA by limiting the response of women's wages. This may have exacerbated the negative effect on employment, limiting one margin of adjustment.