Why is Workplace Sexual Harassment Underreported? The Value of Outside Options Amid the Threat of Retaliation

Why is workplace sexual harassment chronically underreported? We hypothesize that employers coerce victims into silence through the threat of a retaliatory firing. To test this, we estimate how two external shocks which reduce workers’ outside options—unemployment rate increases and a sharp cut to unemployment insurance benefits—affect the selectivity of sexual harassment charges filed with the Equal Employment Opportunity Commission. We find that both shocks increase selectivity, which implies an increase in underreporting. Bolstering these findings, anonymous Google searches for “sexual harassment in the workplace” (total prevalence) spike relative to charges filed (reported prevalence) during the Great Recession.