How Age Discrimination in Employment Affects Stockholders

Nancy D. Ursel and Marjorie Armstrong-Stassen

Journal of Labor Research, 2006, vol. 27, issue 1, 89-99

Abstract: We analyze the impact on stock prices, and thus on stockholders, of 84 newspaper announcements regarding corporate age discrimination lawsuits. We find that, on average, initial announcements cause a 2 percent decline in stock price, a $40 million average loss in total stock value for the large firms charged. The stock price decreases are consistent with investor concerns about the firms' ability to attract and retain good employees given the discrimination charges. Though age discrimination in employment is a pervasive and growing problem, such findings may discourage managers from engaging in discriminatory practices.

Date: 2006
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