Labor Force Mobility and Earnings Management

Kalogirou, Fani, Hass, Lars Helge and Hribar, Paul Labor Force Mobility and Earnings Management. UNSPECIFIED.

Download (835kB) | Preview


We examine whether firms in industries with a more mobile labor force engage in less earnings management activities to reduce expected separation costs stemming from labor turnover. Employing an occupation-based measures of labor mobility we find that labor mobility is negatively related to accrual-based and real earnings management for a large sample of US firms. This relation is stronger if labor is more important for value creation in the industry and if the product market competition is more intense in the industry. Moreover, labor mobility is stronger related to earnings management if firms face financial constraints. We employ exogenous variation in worker mobility across states to alleviate endogeneity concerns. Overall, we show that employees have a significant impact on firm’s earnings management activities.

Item Type: Other Working Paper
Keywords: financial reporting, earnings management, employee relationships, labor mobility, accounting
Subject(s): Accounting
Date Deposited: 03 Oct 2018 13:25
Last Modified: 03 Oct 2018 13:25
Funders: N/A

View statistics

Actions (login required)

Edit View Edit View