Does Mandating Women on Corporate Boards Backfire?

Abstract

This paper explores the implications of external pressure to increase board gender
diversity for female labor demand. Applying textual analysis to job ads in the US, we
first show that firms with a higher share of female directors write less female-friendly job
ads. This is especially true at firms that face greater pressure from their shareholders.
Using the enactment of SB 826 in California as an exogeneous shock helps establish the
causal effect of board gender quotas on female labor demand. Supplemental evidence
from employee reviews and female employment reveals negative consequences beyond
job ads. Overall, our results show that board gender quotas trigger backlashes in firms,
worsening female labor market outcomes.

Keywords: Backlash, Board Gender Quotas, Job Postings, Female Employment, Board of Directors, Corporate Governance, Textual Analysis

JEL Classification: G30, G34, J16, J21, J23