Financial Reporting Quality and Wage Differentials: Evidence from Worker-Level Data

We examine whether financial reporting quality affects worker wages using employer-employee matched data in the United States. We find that low financial reporting quality is associated with a compensating wage differential—that is, a risk premium—using three distinct approaches while controlling for worker characteristics by (1) regressing wages on firm-year–level and firm-level reporting quality, (2) documenting wage changes when workers switch firms, and (3) estimating a structural approach that separates reporting quality from performance-related volatility. We find evidence consistent with two channels: performance pay and turnover risk, where workers bear risks from noise in performance measurement and unemployment, respectively. To mitigate endogeneity concerns, we show that—after the accounting scandals in 2002 and after the announcements of an internal control weakness (ICW)—former Arthur Andersen clients and ICW firms pay wage premiums to employees, with magnitudes between 0.9% and 2.8% of annual wages.     

Minimum wages and non-listed firm’s earnings management: Evidence from a geographic discontinuity design

We examine how and to what extent minimum wage shapes non-listed firms’ earnings information production. To identify the causality, we introduce an improved geographic information system technique to locate firms in areas that straddle the continuities of county borders and then exploit discontinuities of minimum wage at county borders. We find that firms significantly manage earnings information upward as response to increases in minimum wages, particularly for firms with financial constraints. Our findings shed light on the effects of labor policy on the information production of firms and provide policy implications to regulators concerned with the allocation efficiency of capital markets.     

Minimally altruistic wages and unemployment in a matching model with monopsony

A monopsony model with a symmetric equilibrium is developed where posting higher wages reduces employee departures. This monopsony implies that wage changes have small effects on profits so that employer altruism affects wages as well. Even selfish firms act altruistically if workers punish firms that fail to do so. If the marginal utility of income falls sharply with income, the model can explain modest responses of wages to shifts in labor demand. If there are fluctuations in the altruism required by workers, the low correlation of wages and employment and the sizes of the cyclical fluctuations in these two series can be rationalized.     

职工薪酬与会计稳健性——基于中国上市公司的经验证据

企业职工对未来可持续的高工资和管理层对未来低劳动力成本的不同期望,可能导致两者对会计稳健性需求的差异。本文以Khan et al.(2009)的C Score为会计稳健性的计量方式,分析了职工薪酬、工资刚性与会计稳健性的关系。结果显示:较高的职工薪酬与较强的会计稳健性相联系;工资的向下刚性特征与较强的会计稳健性相联系;作为工会规模代理变量的职工人数也与会计稳健性显著正相关。此外2008年实行《新劳动合同法》之后,企业的会计稳健性有了显著提高,这也可能侧面体现了职工与会计稳健性的关系。本文的研究意义在于联结了传统的职工薪酬研究和会计稳健性研究,对Watts(2003)提出的与会计稳健性相关的契约集合进行了扩展,显示了职工薪酬契约对会计稳健性的影响。     

The business cycle implications of reciprocity in labor relations

A reciprocity-based model of wage determination is incorporated into a modern dynamic general equilibrium framework and estimated on U.S. data. The estimation reveals that rent-sharing (between workers and firms) and wage entitlement (based on past wages) are important determinants of wage setting for the model to fit the dynamic responses of output, wages and inflation to various exogenous shocks. Aggregate employment conditions (measuring workers’ outside option), on the other hand, are found to play only a negligible role for wage setting. These results are consistent with micro-studies on reciprocity in labor relations but contrast with traditional efficiency wage models which emphasize aggregate labor market variables as the determinants of wage setting.     

Output and employment in a macro model with discrete transaction costs

The paper develops a macro model for determining output and employment when discrete transaction costs exist for paying wages and for purchasing commodities. Household labor supply is a function of an effective real wage, which modifies the apparent real wage to take account of the length of the payment period and the costs associated with buying and holding commodities. Firm labor demand is derived in a model where there are lumpy payroll costs associated with making wage payments. The behavior of households and firms is brought together in a market-clearing framework to determine the values of the real wage, employment and output, as well as the time intervals between wage payments and purchases of commodities. The effects of changes in the transaction and holding cost parameters are then examined by comparative-static techniques. An increase in any of these cost parameters turns out to reduce output and the amount of labor employed in production, but also tends to raise the amount of labor absorbed by the process of transacting. The tendency of transaction labor to move in the opposite direction from production labor implies that the net effects on total work are ambiguous.     

会计师事务所的地区竞争优势与审计质量

本文研究会计师事务所的地区竞争优势与审计质量之间的关系。文章以2002—2009年为样本区间,以会计师事务所在某一地区的市场份额来衡量其地区竞争优势,以操纵性应计的绝对值和正向、负向水平衡量审计质量。研究发现,会计师事务所的地区竞争优势越大,操纵性应计的绝对值以及正向应计的水平越低,而会计师事务所的地区竞争优势对于负向应计的影响程度较弱。本文的研究表明,会计师的地区竞争优势越大,审计质量越高。     

会计师事务所人力资本特征与审计质量——来自中国资本市场的经验证据

人力资本在会计师事务所中具有十分重要的意义。本文利用2009年我国会计师事务所及其非金融类上市公司客户的数据,以操控性应计额度量审计质量,检验会计师事务所中注册会计师所占比重以及注册会计师的学历、年龄、参加行业领军人才培训情况等人力资本特征对审计质量的影响,结果发现,在我国本土事务所中,注册会计师的年龄以及入选行业领军人才培训计划的人数与正向的操控性应计额之间存在显著的负向关系,这表明,会计师事务所中注册会计师的经验丰富程度和对培训的重视程度对于抑制客户的正向盈余管理行为、提高审计质量具有积极作用。文章没有发现会计师事务所中注册会计师的比重以及注册会计师中高学历者所占比重与审计质量之间存在显著关系的证据。     

融资约束会导致劳动收入份额下降吗?——基于世界银行提供的中国企业数据的实证研究

本文考察了融资约束对劳动收入份额的影响。首先基于文献提出了一个假说,面临融资约束的企业,通过信贷获得流动资本的能力受到限制,它们倾向于减少劳动雇用或降低工资水平,从而对劳动收入份额产生负面影响。通过对世界银行提供的中国企业数据进行系统GMM估计和稳健性分析,我们找到了这一命题的支持性证据:私人企业的负债资产比(融资约束的代理变量)与劳动收入份额显著负相关,而国有企业和外资企业则没有类似的结论。出现这一差异的关键原因是,在中国,只有私人企业面临着融资约束的困扰。     

New Keynesian perspectives on labor market dynamics

We find that demand shocks play an important role for business-cycle fluctuations in unemployment and job vacancies. The reason is that those shocks give a strong incentive to demand-constrained firms to adjust production and thereby labor input. Furthermore we argue that whether real wage rigidity à la Hall [2005. Employment fluctuations with equilibrium wage stickiness. American Economic Review 95, 50–65] helps explain the remaining part of the unemployment volatility puzzle depends critically on assumptions regarding the form of the wage bargain between firms and workers. Real wage rigidity tends to generate volatility in employment only in the case in which hours are chosen efficiently. If, on the other hand, the real wage is allowed to affect firms's choices of hours directly, the feature of real wage rigidity loses its ability to increase employment volatility.     

最低工资标准提高对企业资本劳动比的影响研究

资本劳动比的提高对企业发展、经济增长和结构转型都具有重要意义。本文利用2002—2011年中国工业企业数据和283个地级市统计数据,探讨了最低工资标准提高对企业资本劳动比的影响。研究发现,最低工资标准提升对制造业企业资本劳动比具有显著的正向影响。平均而言,最低工资标准每提升10%,企业资本劳动比将提高2%,该结果在工具变量回归、双重差分法等多项稳健性检验下均成立。机制分析表明,最低工资标准提高会使企业增加资本投入和减少劳动力雇佣,这一结论为企业用资本替代劳动力的事实提供了直接证据。异质性分析表明,最低工资标准提升对企业资本劳动比的影响主要集中于非国有企业、较低工资水平企业和劳动密集型企业。进一步研究发现,随着最低工资标准提升,企业生产率和盈利能力显著提高,从而佐证了企业用资本替代劳动力的积极效应。本文的研究为进一步完善最低工资制度,促进经济转型升级提供了经验依据与政策启示。     

Wage rigidity and job creation

Recent research in macroeconomics emphasizes the role of wage rigidity in accounting for the volatility of unemployment fluctuations. We use worker-level data from the CPS to measure the sensitivity of wages of newly hired workers to changes in aggregate labor market conditions. The wage of new hires, unlike the aggregate wage, is volatile and responds almost one-to-one to changes in labor productivity. We conclude that there is little evidence for wage rigidity in the data.     

Downward wage rigidity and business cycle asymmetries

The growth rates of wages, unemployment and output of a number of OECD countries have a strongly skewed distribution. In this paper we analyze to what extent downward wage rigidities can explain these empirical business cycle asymmetries. To this aim, we introduce asymmetric wage adjustment costs in a New-Keynesian DSGE model with search and matching frictions in the labor market. Increasing wages is less costly than cutting them. It follows that wages increase relatively fast and thus limit vacancy posting and employment creation, but they decline more slowly, leading to a strong reduction in vacancies and employment. The presence of downward wage rigidities strongly improves the fit of the model to the observed skewness of labor market variables and the relative length of expansions and contractions in the output and the employment cycles. The asymmetry also explains the differing transmission of positive and negative monetary policy shocks from wages to inflation.     

Minimum Wage in Poland and Youth Employment in Regional Labor Markets

The aim of this article is to analyze the effect of a uniform minimum wage in Poland on youth employment in regional labor markets and to determine in which of the regions the effect is significant. The analyses are based on NUTS2 level in 1999–2012. The results point to a statistically insignificant parameter of minimum wage variable for the whole sample. However, after allowing the minimum wage parameter to vary across regions, we find that the relatively high ratio of minimum to average wages could be the factor limiting youth employment growth in less-developed regions in the southeast of Poland.     

The Role of Real Wage Rigidity and Labor Market Frictions for Inflation Persistence

We analyze the transmission mechanism of wages to inflation within a New Keynesian business cycle model with wage rigidities and labor market frictions. Our main focus is on the channel of real wage rigidities on inflation persistence for which we find the specification of the wage bargaining process to be of crucial importance. Under the standard efficient Nash bargaining, the feedback of wage rigidities on inflation is ambiguous and depends on other labor market variables. However, under the alternative right‐to‐manage bargaining we find that more rigid wages translate directly into more persistent movements of aggregate inflation.     

Employment and wage effects of a payroll-tax cut—evidence from a regional experiment

In this paper, we evaluate the effects of a regional experiment that reduced payroll taxes by 3–6 percentage points for 3 years in northern Finland. We match each firm in the target region with a similar firm in a comparison region and estimate the effect of the payroll tax reduction by comparing employment and wage changes within the matched pairs before and after the start of the experiment. According to our results, the reduction in the payroll taxes led to an increase in wages in the target region. The point estimates indicate that the increase in wages offset roughly half of the impact of the payroll tax cut on the labor costs. The remaining labor cost reduction had no significant effects on employment.     

CPAs and Big 4 office audit quality

Both accounting firms and regulators recognize the importance of human capital in the audit function, yet we know little about whether and how the level of professionally qualified human capital varies across offices of an audit firm and whether it is associated with audit quality. In this paper, we examine the association between office professionally qualified human capital and audit quality. Using hand-collected data on Big 4 audit firm office CPA levels from 30 U.S. cities, we find that offices with relatively more professionally qualified human capital deliver higher quality audits, with this benefit being more pronounced for audits performed during busy season than for non-busy season audits. The results underscore the importance of the availability of professionally qualified human capital in an audit office to the office’s audit quality. Our finding of CPA levels being an office-level audit quality indicator will potentially help the PCAOB in their ongoing Audit Quality Indicator (AQI) project, whose goal is to assist audit firms, clients, and investors in measuring audit quality. Furthermore, the results lend credibility toward the CPA designation, which helps justify the AICPA’s, NASBA’s, and state Accountancy Boards’ regulatory roles of admitting and licensing qualified candidates.     

The valuation-relevance of the foreign translation adjustment: The effect of barriers to entry

We examine the economic effects of barriers to entry on the association between foreign currency translation adjustments and the stock returns of multinational firms operating in the manufacturing and service industries. Firms that are innovation leaders, that is, firms that are research and development (R&D) intensive and firms with high foreign asset intensity (i.e., asset-intensive firms), are our proxies for firms operating in environments with barriers to entry (i.e., environments in which competition is less intense). We hypothesize and find that foreign currency translation adjustments are positively associated with abnormal stock returns for firms operating in environments with barriers to entry in both manufacturing and service industries. This finding highlights the importance of assessing the valuation-relevance of foreign currency translation adjustments by considering the economic contexts of foreign currency movements. Overall, the evidence shows that the accounting rules governing foreign currency translations generally produce results consistent with the economic effects of foreign exchange rate changes.     

Dividend taxes,employment, and firm productivity

The paper examines the effect of dividend taxation on employment and productivity. I exploit a dividend tax cut of 10 percentage points for closely held private corporations in Sweden. Using data on all closely held Swedish firms with exact information on employees and their wages, I find that firms with limited internal funds increase productivity and wages relative to firms with sufficient internal funds whose investment decisions are less affected by dividend taxes. My findings indicate that dividend taxes constrain firms in investing efficiently. Lower taxes can result in higher capital and labor input and, thus, in higher productivity.     

Taxing multi-nationals under union wage bargaining

This paper investigates corporate taxation under separate accounting (SA) and formula apportionment (FA) in a model with union wage bargaining and multi-national firms. Under SA, we find that increases in the corporate tax rate raise the wage level of domestic workers, while they lower the remuneration of foreign workers. The main insight emerging from a tax competition game is that the endogenous wage level gives rise to an ambiguous fiscal externality, which may dampen the race-to-the-bottom in corporate tax rates. A switch to a tax system with FA principles reverses the impact of corporate taxes on negotiated wages. While increases in the corporate tax rate reduce domestic wages, they raise the wage level of foreign workers. In a tax competition game, the endogenous wage level gives rise to a positive fiscal externality that enforces the race-to-the-bottom in corporate tax rates.