The Distribution of Non-Wage Benefits: Maternity Benefits and Gender Diversity

67 Pages Posted: 19 Dec 2017 Last revised: 29 Jul 2019

See all articles by Tim Liu

Tim Liu

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Christos Makridis

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Paige Ouimet

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Elena Simintzi

University of North Carolina Kenan-Flagler Business School; Centre for Economic Policy Research (CEPR)

Date Written: July 26, 2019

Abstract

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

Suggested Citation

Liu, Tim and Makridis, Christos and Ouimet, Paige and Simintzi, Elena, The Distribution of Non-Wage Benefits: Maternity Benefits and Gender Diversity (July 26, 2019). Available at SSRN: https://ssrn.com/abstract=3088067 or http://dx.doi.org/10.2139/ssrn.3088067

Tim Liu

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Christos Makridis (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Paige Ouimet

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Elena Simintzi

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building, Room 4200B
300 Kenan Center Drive
Chapel Hill, NC 27599-3490
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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