The Distribution of Non-Wage Benefits: Maternity Benefits and Gender Diversity
67 Pages Posted: 19 Dec 2017 Last revised: 29 Jul 2019
Date Written: July 26, 2019
Why do firms offer non-wage compensation instead of the equivalent amount in financial compensation? We argue that firms use non-wage benefits, specifically maternity leave, to efficiently target workers with desirable characteristics. Using Glassdoor data, we show that firms offer higher quality maternity benefits in industries and locations where female talent is relatively scarce -- a relationship robust to an instrumental variable analysis. Second, using plausibly exogenous variation in the timing of government policy, we show that these benefits can increase firm value. Third, we document novel stylized facts about non-wage benefits and how they are correlated with firm characteristics.
Keywords: Non-Wage Compensation, Compensation, Corporate Finance
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