Socially Useless Jobs

Recent research suggests that many workers in modern economies think that their job is socially useless, i.e., that it makes no or a negative contribution to society. However, the evidence so far is mainly anecdotal. We use a representative dataset comprising 100,000 workers from forty‐seven countries at four points in time. We find that approximately 8 percent of workers perceive their job as socially useless, while another 17 percent are doubtful about the usefulness of their job. There are sizeable differences among countries, sectors, occupations, and age groups, but no trend over time. A vast majority of workers cares about holding a socially useful job and we find that they suffer when they consider their job useless. We also explore possible causes of socially useless jobs, including bad management, strict job protection legislation, harmful economic activities, labor hoarding, and division of labor.     

The endogeneity bias in the relation between cost-of-debt capital and corporate disclosure policy

Abstract

The purpose of this paper is twofold. First, we provide a discussion of the problems associated with endogeneity in empirical accounting research. We emphasize problems arising when endogeneity is caused by (1) unobservable firm-specific factors and (2) omitted variables, and discuss the merits and drawbacks of using panel data techniques to address these causes. Second, we investigate the magnitude of endogeneity bias in Ordinary Least Squares (OLS) regressions of cost-of-debt capital on firm disclosure policy. We document how including a set of variables which theory suggests to be related with both cost-of-debt capital and disclosure and using fixed effects estimation in a panel data-set reduces the endogeneity bias and produces consistent results. This analysis reveals that the effect of disclosure policy on cost-of-debt capital is 200% higher than what is found in OLS estimation. Finally, we provide direct evidence that disclosure is impacted by unobservable firm-specific factors that are also correlated with cost of capital.     

Pressure and Politics in Financial Accounting Regulation: The Case of the Financial Conglomerates in the Netherlands

This article examines the political process of promulgating two controversial laws which pertain to the reporting of Dutch financial conglomerates. Central to the study is the exploration of the lobbying efforts observed during the process, and the interaction between the government, the supervisors of banks and insurance companies, the industry and its associations, and the users and auditors of annual reports of financial conglomerates. Previous studies in accounting-rule development have often ignored influences that do not fall within the formal regulatory procedures. By adopting an inductive research approach, this study explores in some detail the behaviour of participants, including their use of informal lobbying methods. Pluralist theory is used to explain the nature of the political process and the behaviour of interested parties. The findings indicate that the Dutch political process in accounting matters is indeed pluralistic. Although auditors and producers of accounts seem to have greater possibilities to participate, the users of corporate reports are able to voice their opinion effectively. Overall, the users' preferences were acknowledged in the final rules governing the reporting by financial conglomerates.     

Endogeneity in Management Accounting Research: A Comment

Abstract

Chenhall and Moers (European Accounting Review, this issue, pp. 173–195) provide an excellent overview of the econometrics of endogeneity. In response to their discussion I argue that researchers should be courageous enough to set aside endogeneity concerns when their research question is important. Theory does not admit a definite answer to the question whether endogeneity is present in a particular model and econometrics has few technical solutions to offer. Since we cannot be sure endogeneity exists, and if we were to be sure of its existence, there is little we can do about it, researchers are well advised to move on to more serious problems.     

An efficient heuristic for medium-term planning in shampoo production

This paper presents a single machine problem which occurs in shampoo production at medium-term planning phase. The considered production plant is linked to subsidiary companies which are themselves linked to final customers. The aim is to answer subsidiary companies requests by keeping their stocks in a window defined by their safety stock and maximum inventory levels. After an introduction, we present a formal definition of the problem. Next, we present a two-phase heuristic algorithm: the first phase is based on a greedy algorithm and the second phase on the Goldberg and Tarjan algorithm for the minimum cost flow problem. Experimental testings close to industrial instances show that the heuristic performs very efficiently.     

Goal Setting,Information, and Goal Revision: A Field Experiment

People typically set goals in settings where they cannot be sure of how they will perform, but where their performance is revealed to them in parts over time. When part of the uncertainty is resolved, initial goals may have turned out to be unrealistic and hence they no longer work as a motivation device. Revising goals may increase performance by making goals realistic, but may also adversely affect performance through reduced goal commitment. We study the effects of motivating university students to set goals and inviting them to revise their goals later, using a field experiment involving nearly 2,100 students. We use courses containing two midterms and a final exam, where midterms reduce uncertainty about students’ potential performance. We find that motivating students to set goals does not affect performance on average. Students with midterm grades lower than their goal, decrease their performance. This effect is driven by students who were motivated to set goals without being made aware that they can revise their goals later. This finding may help explain why the evidence of the effectiveness of goals on study performance is mixed.