Human Capital Disclosure and Labor Market Outcomes: Evidence from Regulation S-K

Abstract

We examine the labor market consequences of the 2020 Regulation S-K requiring human capital disclosure in 10K filings. Using large-sample job-level data, we observe that public firms subject to the regulation increase their disclosure of diversity, equity, and inclusion (DEI) information in job postings relative to a matched sample of large private firms. The increase in job-posting disclosure is more pronounced among firms facing greater external pressure to increase their workforce diversity. These findings suggest a shift in demand for diverse candidates by public firms following the regulation. Yet, consistent with short-term inelastic labor supply, this demand shift lengthens the recruitment period, while noticeable improvements in diversity are observed starting four quarters after the regulation, particularly among firms that demonstrate a credible commitment to DEI. Our study documents how securities regulations can impact labor market disclosure and underscores the challenges involved in improving workforce diversity.