We've Got You Covered: Firms' Political Stances on Abortion and Labor Market Sorting

Amidst rising political polarization, firms engage more frequently with political issues through public statements and policies.This paper examines how firms' stances on polarizing issues impact worker sorting, leveraging announcements from hundreds of employers following the Supreme Court's ruling in Dobbs v. Jackson, overturning federal abortion rights.We introduce a methodology to uncover labor market competitors for each announcing firm based on job seekers' revealed preferences.While announcing firms received more applications from job seekers, particularly in Democratic-leaning states and female-dominated jobs where abortion was outlawed, current employees began searching for jobs elsewhere as employee satisfaction declined, particularly among male-dominated jobs.Smaller companies with less-established reputations experienced the largest effects.When deciding whether to take a sociopolitical stance, firms face a complicated trade-off: attracting culturally-aligned workers at the expense of alienating current ones.