Fertility-Based Discrimination: Evidence from the Pregnancy Discrimination Act of 1978
Abstract
Identifying the role of expected fertility as a driver of gender discrimination is crucial to guide policy solutions, but is hindered by the fact that pregnancy discrimination is typically addressed by broader gender-discrimination policies. This was not the case in the U.S., where before the 1978 Pregnancy Discrimination Act (PDA) pregnancy constituted a legal exception to existing gender discrimination laws. Exploiting states’ staggered adoption of laws similar to the PDA, we use difference-in-differences estimates based on survey data to show that the PDA reduced employment and hiring of women of fertile age, while having no detectable effect on dismissals. Our estimates imply that nearly 30% of the gender employment gap at the time was due to potential fertility. A simple search-and-matching model explains these results: by raising firing costs for discriminating employers, the PDA discouraged hiring but was not enforced strongly enough to prevent dismissals of pregnant employees. Finally, we show that pre-existing equal pay laws limited wage adjustments, exacerbating the negative effect on employment.