Panel Paper: Assessing the Extent and Effect of Nondiscrimination Policies Related to Sexual Orientation and Gender Identity

Thursday, November 8, 2012 : 10:55 AM
Adams (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Lee Badgett, University of Massachusetts, Amherst

This study analyzes the impact of state-level and voluntary nondiscrimination policies that include sexual orientation and gender identity in the United States. The first part of the research study measures impact with policy coverage. We draw on establishment-level data from the Equal Employment Opportunity Commission’s EEO-1 reports to analyze the extent of laws and voluntary policies protecting employees against discrimination based on sexual orientation and gender identity, including the provision of domestic partner benefits. Preliminary findings show that 55% of employees are covered by sexual orientation nondiscrimination policies, while only 34% are covered by gender identity nondiscrimination policies and 38% have access to health insurance benefits for same-sex partners. We also analyze the increase in policy coverage that would result from requiring all federal contractors to include sexual orientation and gender identity nondiscrimination policies. Such a requirement would provide one or more protections to an additional 16 million additional employees. The second part of the study involves assessing the impact of state-level and voluntary nondiscrimination policies on various firm outcome measures, in this case on employment and the presence of a federal contract. We test two hypotheses: the “business case for diversity” hypothesis suggests that firms will see positive effects of policies that promote diversity, while the “over-regulation” hypothesis would imply that constraints on firms’ hiring might lead to adverse economic outcomes. To test these hypotheses, we merge 19 years of establishment data for a sample of Fortune 1000 firms. We use difference-in-difference specifications to test for an impact of two treatments: the passage of a statewide nondiscrimination law including sexual orientation and/or gender identity and the adoption of a voluntary nondiscrimination policy.