Does Mandating Nondiscrimination in Hiring Practices Influence Women's Employment? Evidence Using Firm-Level Data

ABSTRACT

This study explores the relationship between mandating a nondiscrimination clause in hiring practices along gender lines and the employment of women versus men in fifty-eight developing countries. Using data from the World Bank's Enterprise Surveys (2006–10), the study finds a strong positive relationship between the nondiscrimination clause and women's relative to men's employment. The relationship is robust to a large number of controls at the firm and country level. Results also show sharp heterogeneity in the relationship between the nondiscrimination clause and women's versus men's employment, with the relationship being much bigger in richer countries and in countries with more women in the population as well as among relatively smaller firms.

KEYWORDS:

• Gender
• employment
• laws

JEL codes:

• J16
• J21
• K10

NOTES ON CONTRIBUTORS

Mohammad Amin is Senior Economist with the Enterprise Analysis Unit at the World Bank Group. His current research interest includes work on gender, informality, and international trade. Prior to joining the Enterprise Analysis Unit, he worked with the Development Economics Research Group (DECRG) of the World Bank, where he conducted research on international trade and migration. Mohammad Amin holds a PhD in Economics from Columbia University.

Asif Islam works with the World Bank Enterprise Analysis Unit with a focus on private-sector development. His research interests include gender, development, government fiscal policy, and environmental economics. Asif holds a PhD in Applied Economics from the University of Maryland–College Park.

ACKNOWLEDGMENTS

We thank Jorge Luis Rodriguez Meza, Rita Ramalho, and anonymous referees for helpful comments. We would also like to thank Sarah Iqbal and Yasmin Klaudia Bin Humam, and the Women, Business and the Law team at the World Bank for their assistance with the data. All remaining errors are our own.

Notes

1 An important assumption in our study is that the nondiscrimination clause is enforceable. We accede that due to data limitations we are unable to make statements on enforceability. We are also unable to completely control for all the theoretical mechanisms identified in the literature; however, whenever possible we do mention controls that may proxy for such mechanisms.

2 As a robustness check, we reestimate the results in Table 5 using Tobit regressions. By and large, the results do not change.

3 We use log values to curb any unduly large effect on our results of firms with extreme values of men and women workers. Use of log values is quite common in the literature; see for example, Table 1 in Juan Botero, Simeon Djankov, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer (2004: 1352).

4 Some studies report a U-shaped relationship between income and women's employment. Our main results are robust to adding a nonlinear term for income.

5 This information is available online at http://www.bls.gov/opub/ted/2011/ted_20110216.htmhttp://www.bls.gov/opub/ted/2011/ted_20110216.htm.

6 We also experimented by interacting the nondiscrimination variable with industry concentration ratios, under the assumption that the positive effect of nondiscrimination on women's employment is likely to be bigger (more positive) in sectors that are less competitive. The results broadly confirm this conjecture and are available in an online Appendix, located at http://works.bepress.com/mohammad_amin/59/http://works.bepress.com/mohammad_amin/59/.

7 Results controlling for CIRI Human Rights measures are available in an online Appendix, located at http://works.bepress.com/mohammad_amin/59/.