A company's pro-choice stance on abortion is the equivalent of a 12% wage increase, new research into job seekers' interest shows
Just over a year ago, the Dobbs v Jackson Supreme Court decision overturned Roe v Wade and allowed states to immediately limit abortion access for millions of women across the country. In the void left behind, numerous companies publicly pledged to cover out-of-state travel for their employees to obtain an abortion or related reproductive healthcare services such as miscarriage care.
As polarizing political views split friendships and families, some question why politics must also enter the office. Is it a good idea for firms to weigh in on a sensitive issue like abortion–and do these statements impact the firm’s bottom line? As companies decide whether to speak up on controversial social and political issues, there are workforce benefits that may be hard to ignore. Based on my new research, I show companies that made announcements covering reproductive care after the Dobbs ruling reaped enormous benefits in terms of recruiting new employees.
In We’ve Got You Covered: Employer and Employee Responses to Dobbs v. Jackson, my coauthors, Pawel Adrjan, Svenja Gudell, Allison Shrivastava, Jason Sockin, Evan Starr and I provide the first evidence on the impacts of a company making a public announcement to cover out-of-state abortion care on recruitment of new workers and job satisfaction amongst existing employees. The results we uncover are based on the analysis of data from Indeed and Glassdoor, consisting of 3 billion job seekers’ clicks on U.S. job postings and 6.5 million company reviews.
The kind of companies that take a stand
Based on 487 firms who made announcements directly after the Dobbs ruling, we found gender and location of employees are two key contributing factors to announcement decisions. First, female representation matters. Firms with a greater share of women–from the CEO to rank-and-file workers–are more likely to make a public announcement of their commitment to cover reproductive care. An absence of statements can discourage and alienate key employees, potentially negatively impacting hiring and retention rates for future and existing employees in women-dominated fields.
We also find these public announcements are more likely to come from companies with more employees in democratic-leaning states. Given that restricted access to reproductive healthcare is unpopular in these states, employees living in these areas are more likely to take a liberal position when it comes to abortion policy. Both facts suggest companies believe that their decision to announce or abstain from abortion policies might significantly impact their recruitment and retention efforts.
When comparing firms that made public announcements to their peers which did not, our research reveals job postings from announcing firms receive 8% more interest from potential job seekers. Notably, in states where the Dobbs ruling led to an immediate abortion ban, this positive jump in recruiting is especially pronounced for women-dominated job postings. This result suggests that company policies may be providing a lifeline for the women most impacted by abortion bans. Announcements have a large impact on attracting new employees: Companies would have to increase their posted wages by 12% to achieve a similar boost in job seeker interest.
However, we also find that at least some existing employees are disgruntled by the public announcements of post-Dobbs reproductive healthcare benefits. When we examine how announcements impacted job satisfaction, we find an immediate 8% decrease in how current and former employees rated senior management and company culture on Glassdoor. This decrease in satisfaction is especially pronounced for male-dominated jobs, such as engineering (the drop in satisfaction is 277% steeper than average) and data scientists (satisfaction dropped by 143% more than average).
A boon to recruiting
When we analyze changes in particular words written in the free-text part of reviews, we document a 325% increase in the use of the word “woke” in the cons section, suggesting that some employees take issue with “woke policies” entering the workplace. We also find evidence that the composition of workers leaving negative reviews changed post-Dobbs in a way that suggests this average deterioration in job satisfaction could be driven by a vocal minority.
Nevertheless, my conclusion based on the sum of our research is that these firms generally benefitted from their announcements, at least when it comes to their workforce. While we find that firms who made announcements raised wages by 4%, likely to offset dissatisfaction by a vocal minority, the boon to recruiting was equivalent to what could be achieved with a 12% increase in posted wages. Thus, these firms will most likely have greater access to eager future employees without paying a premium on wages, a significant labor market advantage over their competitors.
While it will take some time to see if this bump in recruiting leads to gains in long-term profitability, the initial results are clear: It’s unknown how each company weighs the economic and moral reasons to get involved with polarizing issues, but the workforce benefits we document suggest the companies that announced their support for women’s reproductive rights likely made the right choice. By offering to help women post-Dobbs, these companies reaped the benefits in terms of recruiting.
Emily Nix is an assistant professor of finance and business economics at USC Marshall School of Business.
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