Anti-Harassment Policy and the Startup Labor Market

Jun Chen, Song Ma and Feng Zhang

No 35187, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines how anti-harassment legal reforms that weaken non-disclosure agreements (NDAs) in cases of workplace sexual harassment affect startups' hiring and organizational decisions. Using a staggered difference-in-differences design and LinkedIn data on over 50,000 U.S. venture-capital-backed startups from 2014–2022, we find that NDA reforms, although intended for employee protection, reduce female hiring by about 8%, with effects concentrated among junior women, who are statistically more prone to sexual harassment, and in small or male-dominated startups. The results apply to both the intensive and extensive margins of female hiring. Treated entrepreneurial firms also witness more departures of male managers, promote more women, and receive less VC funding. These results suggest that while NDA-weakening laws increase firms’ perceived legal risk and reduce female hiring, they also trigger internal restructuring that promotes women's advancement into leadership and may, over time, foster more accountable and inclusive organizational cultures.

JEL-codes: G0 J0 K0 M14 M5 (search for similar items in EconPapers)
Date: 2026-05
Note: CF LE LS PE POL PR
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