Imagine working hard to build your career, only to find that harassment (not your skills or ambition) becomes the biggest threat to your financial stability. The financial fallout from harassment is real, yet it’s often overlooked. Women who experience harassment are more likely to face career instability, lower earnings, and smaller retirement savings. While the emotional toll is widely discussed, the financial damage can be just as devastating—and longer-lasting.
Career disruption and earning loss
Economist Adam Smith once argued that unpleasant working conditions should come with higher pay to make up for the hardship. But in reality, harassment often drives women out of their jobs—and they rarely receive that extra pay.
Research shows that women who leave their jobs after experiencing harassment often end up earning 21% less than those who switch jobs on their own terms. Harassment survivors are also 6.5 times more likely to leave their roles within two years, creating career instability that limits promotions and pay raises.
When women leave toxic workplaces, they often switch to less competitive roles with fewer opportunities for growth. This is especially common in fields like construction, IT, and engineering – industries that already have fewer women in leadership roles. As a result, harassment reinforces the gender pay gap, pushing women away from higher-paying career paths.
Financial stress and emotional toll
The financial burden of harassment extends beyond lost wages. Research shows that harassment survivors report significantly greater financial stress—on par with the effects of serious injury, illness, or even incarceration. This “scarring effect” leaves lasting financial and emotional damage.
Financial stress can vary based on personal circumstances. Married or cohabiting women with access to money often face less financial strain than single women, thanks to dual-income stability. Meanwhile, mothers tend to report higher financial stress, as career disruptions can compound childcare costs and household expenses.
Interestingly, research also highlights that while men may experience harassment, the financial impact is generally less severe. Men tend to secure relatively higher-paying roles even after disruptions, whereas women face greater long-term economic disadvantages.
The pay gap widens
Harassment doesn’t just limit individual careers—it shapes entire industries. Women often move to sectors or roles with fewer men to avoid further mistreatment. This shift leads to occupational segregation, a key factor that explains up to half of the gender pay gap.
Additionally, women who leave jobs due to harassment often miss out on pension contributions, employer-matched savings, and other retirement benefits. Losing employer-sponsored healthcare can also drain personal savings, reducing their ability to build long-term financial security.
In the U.S., women aged 55-59 are 11% more likely to live in poverty than men in the same age group. For women over 65, that number jumps to 37%. The financial setbacks caused by harassment compound over time, resulting in fewer savings and a greater risk of poverty in retirement.
Regional disparities
The financial impact of workplace harassment can vary by region. In Europe, stronger legal protections help women recover financially after harassment. For example, Scandinavian countries, known for their gender-equal policies, have higher female workforce participation rates and better retirement outcomes.
In contrast, parts of Asia with weaker legal protections see more severe economic consequences. Women in manufacturing, agriculture, and informal sectors are especially vulnerable, facing wage suppression and limited financial safety nets.
The link between workplace safety and financial independence is striking. According to the IMF, women in regions with stronger harassment protections are more likely to access financial services like banking, loans, and investments. Financial inclusion scores are 16% higher in emerging markets and 25% higher in sub-Saharan Africa where such protections are enforced. This financial security gives women more control over their lives and boosts broader economic growth.
Breaking the cycle
Tackling workplace harassment is key to protecting women’s financial futures. While stronger laws help, companies must take action too. Building inclusive workplace cultures, creating safe reporting channels, and holding harassers accountable can make a huge difference.
Serein has 10+ years of experience supporting companies globally to build systems that ensure safety in the workplace. Reach out at hello@serein.in to explore how we can help.