Scaling up to Decrease the Divide: Firm Size and Female Employment

Using firm and individual-level data, we provide reduced-form evidence suggesting a positive relationship between relative female employment and firm size. We then use a difference-in-difference strategy exploiting a natural experiment in Indian labor law amendments that raised firm size thresholds for regulatory compliance. We document a resulting 4.2% increase in female worker share in the treated states, along with a 5% and 15% rise in employment and output, respectively. Larger firms providing amenities like maternity benefits, transport, and paid leave, valued more by women, likely drive these results. Our findings suggest that policies promoting firm growth can enhance female employment.