Abstract
India is one of a handful of countries that has mandated that firms set up an internal complaints committee to encourage reporting and redressal of sexual harassment against women. We examine impacts of this legislation, the 2013 Prevention of Sexual Harassment Act (POSH), on the employment of women relative to men, leveraging a discontinuity in the scope of the mandate, which is that it applies to firms with ten or more workers. The analysis proceeds in two steps. First, using nationally representative individual-level data on employment in paid work across sectors, we estimate a 12% decline in the probability that women relative to men are employed in the regulated sector. In the second part of the analysis, we replicate this finding in a firm panel- the share of women in regulated firms falls by close to 5%. We show that a simple model of firm behaviour predicts that firms seeking to minimize sexual harassment cases will act to lower the share of women if and only if baseline male share is high which, on average it is. Consistent with our model, we find no decline in the share of women in the (smaller) sample of firms with low baseline male share. We see some bunching to the left of the size-ten threshold, consistent with firm size manipulation, but the share of switchers is small. We nevertheless show that our estimates are robust to a donut design that drops firms near the threshold. Overall, our results show that after POSH, women were into smaller (unregulated) firms where wages and amenities are lower, and the share of men – a determinant of sexual harassment risk – is higher.