The Distribution of Non-Wage Benefits: Maternity Benefits and Gender Diversity
61 Pages Posted: 19 Dec 2017 Last revised: 18 Jun 2021
Date Written: June 18, 2021
Why do firms offer non-wage compensation instead of the equivalent amount in financial compensation? We argue that firms use non-wage benefits, specifically female-friendly benefits such as maternity leave, to increase gender diversity by efficiently attracting women. Using Glassdoor data, we show that firms offer higher quality maternity leave benefits in labor markets where female talent is relatively scarce. As a result, we show that firms offering better quality maternity leave benefits are more gender diverse. Moreover, using staggered adoption of state laws, we show that voluntary provision of these benefits can increase firm value.
Keywords: Non-Wage Compensation, Compensation, Corporate Finance
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