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

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 with greater external pressure and lower internal coordination needs. 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 and results in only slight improvements in workforce diversity for public firms, partly due to poaching among these firms. Limited improvements in diversity are observable in firms that exhibit a stronger demand for diverse candidates and a credible commitment to DEI. Our study documents how securities regulations can impact labor market disclosure and underscores the significant constraints involved in improving workforce diversity in the short run.