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Labor market frictions for female workers and corporate innovation

Author

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  • Lim, Hyuksoon

Abstract

I investigate the impact of labor market frictions for female workers on corporate innovation. Following the adoption of state-level paid family leave acts, which exogenously facilitate labor market participation of female employees, firms headquartered in affected states show significant increases in their innovation relative to unaffected firms. This effect is stronger for firms more reliant on a skilled workforce, in less tight local labor markets, with lower female employment, and that have higher female turnover. These findings support my hypothesis that the adoption of paid family leave acts fosters corporate innovation by improving talent allocation through an expanded labor supply of female workers. Overall, my results imply that labor market frictions for working mothers inhibit corporate innovation.

Suggested Citation

  • Lim, Hyuksoon, 2025. "Labor market frictions for female workers and corporate innovation," Finance Research Letters, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003563
    DOI: 10.1016/j.frl.2025.107093
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    More about this item

    Keywords

    Corporate innovation; Paid family leave; Female labor supply; Talent allocation;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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