NBER Publications by Wendy Stock

The question of the effects of race and sex discrimination laws on relative economic outcomes for blacks and women has been of interest at least since the Civil Rights and Equal Pay Acts passed in the 1960s. We present new evidence on the effects of these laws based on variation induced first by state anti-discrimination statutes passed prior to the federal legislation and then by the extension of anti-discrimination prohibitions to the remaining states with the passage of federal legislation. This evidence improves upon earlier time-series studies of the effects of anti-discrimination legislation. It is complementary to more recent work that revisits this question using data and statistical experiments that provide 'treatment' and 'comparison' groups. We examine the effects of race and...

In Lazear's (1979) model of efficient long-term incentive contracts, employers impose involuntary retirement based on age. This model implies that age discrimination laws, which bar involuntary terminations based on age, discourage the use of such contracts and reduce efficiency. Alternatively, by making it costly for firms to dismiss older workers paid in excess of their marginal product, such laws may serve as precommitment devices that make credible the long-term commitment to workers that firms must make under Lazear contracts. Given that employers remain able to use financial incentives to induce retirement, age discrimination laws may instead strengthen the bonds between workers and firms and encourage efficient Lazear contracts. We assess evidence on these alternative interpretati...