Abortion Restrictions and Their Impact on Firm Valuation: Evidence from U.S. Equity Markets

Sammanfattning

This study examines whether the Dobbs v. Jackson Women's Health Organization ruling of June 2022, which eliminated the federal constitutional right to abortion in the United States, was priced into the equity valuations of publicly listed U.S. firms. Using a difference-in-differences design over 2019 to 2024, with Tobin's Q as the dependent variable, we test two channels through which the ruling may have affected firm value: (1) whether investors revised their expectations about workforce continuity at firms heavily dependent on women of reproductive age, and (2) whether the ruling's salience around gender prompted investors to discount female-led firms. We find support for the first channel: Firms in abortion-ban states with a high share of reproductive-age female workers experienced a relative valuation decline compared to otherwise similar firms. We find no support for the female perception channel. Results are robust across multiple specifications including entropy balancing, propensity score matching, and exclusion of pandemic-era and sector-specific confounds.