Showing papers on "Earnings published in 2021"
TL;DR: In this paper, the authors examined the gender earnings gap among rideshare drivers in the U.S. and found that women's relatively high opportunity cost of non-paid-work time and gender-based differences in preferences and constraints can sustain a gender pay gap.
Abstract: The growth of the “gig” economy generates worker flexibility that, some have speculated, will favour women. We explore this by examining labour supply choices and earnings among more than a million rideshare drivers on Uber in the U.S. We document a roughly 7% gender earnings gap amongst drivers. We show that this gap can be entirely attributed to three factors: experience on the platform (learning-by-doing), preferences and constraints over where to work (driven largely by where drivers live and, to a lesser extent, safety), and preferences for driving speed. We do not find that men and women are differentially affected by a taste for specific hours, a return to within-week work intensity, or customer discrimination. Our results suggest that, in a “gig” economy setting with no gender discrimination and highly flexible labour markets, women’s relatively high opportunity cost of non-paid-work time and gender-based differences in preferences and constraints can sustain a gender pay gap.
181 citations
TL;DR: In this article, the authors assess the impact of carbon-neutral lending on the credit risk in the Eurozone and find that the exposure to carbon neutral lending is negatively related to the default risk.
129 citations
109 citations
TL;DR: In this article, a topic model was used to fit 40,927 COVID-19-related paragraphs in 3,581 earnings calls over the period January 22 to April 30, 2020.
Abstract: After fitting a topic model to 40,927 COVID-19-related paragraphs in 3,581 earnings calls over the period January 22 to April 30, 2020, we obtain firm-level measures of exposure and response related to COVID-19 for 2,894 U.S. firms. We show that despite the large negative impact of COVID-19 on their operations, firms with a strong corporate culture outperform their peers without a strong culture. Moreover, these firms are more likely to support their community, embrace digital transformation, and develop new products than those peers. We conclude that corporate culture is an intangible asset designed to meet unforeseen contingencies as they arise.
73 citations
TL;DR: In this paper, the causal impacts of a reduction in credit supply on consumption, earnings, and employment in general equilibrium in rural labor markets were identified using a proprietary district-level data set from 25 separate, for-profit microlenders matched with household data from the National Sample Survey.
Abstract: In October 2010, the state government of Andhra Pradesh, India, issued an emergency ordinance, bringing microfinance activities in the state to a complete halt and causing a nationwide shock to the liquidity of lenders, especially those with loans in the affected state. We use this massive dislocation in the microfinance market to identify the causal impacts of a reduction in credit supply on consumption, earnings, and employment in general equilibrium in rural labor markets. Using a proprietary district-level data set from 25 separate, for-profit microlenders matched with household data from the National Sample Survey, we find that district-level reductions in credit supply are associated with significant decreases in casual daily wages, household wage earnings, and consumption. We find a substantial consumption multiplier from credit that is likely driven by two channels—aggregate demand and business investment. We calibrate a simple two-period, two-sector model of the rural economy that incorporates both channels and show that the magnitude of our wage results is consistent with the model’s predictions.
62 citations
TL;DR: This paper found that financial constraints increase firms' toxic emissions given that firms actively trade off abatement costs against potential legal liabilities, and the effects of financial constraints on toxic releases are amplified when regulatory enforcement weakens and when myopic managers emphasize short-term earnings performance.
Abstract: This paper documents evidence that financial constraints increase firms' toxic emissions given that firms actively trade off abatement costs against potential legal liabilities. Exploring three quasi-natural experiments in which firms' financial resources are likely exogenously impacted, we find that relaxing financial constraints reduces U.S. public firms' toxic releases. The effects of financial constraints on toxic releases are amplified when regulatory enforcement weakens and when myopic managers emphasize short-term earnings performance. Overall, our evidence highlights the real effects of financial constraints in the form of environmental pollution, which is a costly negative externality imposed on society and public health.
61 citations
TL;DR: The authors studied individual male earnings dynamics over the life cycle using panel data on millions of U.S. workers and found that the distribution of earnings changes exhibits substantial deviations from lognormality, such as negative skewness and very high kurtosis.
Abstract: We study individual male earnings dynamics over the life cycle using panel data on millions of U.S. workers. Using nonparametric methods, we first show that the distribution of earnings changes exhibits substantial deviations from lognormality, such as negative skewness and very high kurtosis. Further, the extent of these nonnormalities varies significantly with age and earnings level, peaking around age 50 and between the 70th and 90th percentiles of the earnings distribution. Second, we estimate nonparametric impulse response functions and find important asymmetries: Positive changes for high‐income individuals are quite transitory, whereas negative ones are very persistent; the opposite is true for low‐income individuals. Third, we turn to long‐run outcomes and find substantial heterogeneity in the cumulative growth rates of earnings and the total number of years individuals spend nonemployed between ages 25 and 55. Finally, by targeting these rich sets of moments, we estimate stochastic processes for earnings that range from the simple to the complex. Our preferred specification features normal mixture innovations to both persistent and transitory components and includes state‐dependent long‐term nonemployment shocks with a realization probability that varies with age and earnings.
57 citations
TL;DR: In this article, the authors provide estimates of the economic loss associated with mass school and university closures due to social distancing requirements associated with COVID-19 have led to mass school closures worldwide.
Abstract: Social distancing requirements associated with COVID-19 have led to mass school and university closures worldwide. The article provides estimates of the economic loss associated with these closures...
51 citations
TL;DR: In this article, the authors analyse the UK policy response to Covid-19 and its impact on household incomes in the UK in April and May 2020, using microsimulation methods.
Abstract: We analyse the UK policy response to Covid-19 and its impact on household incomes in the UK in April and May 2020, using microsimulation methods. We estimate that households lost a substantial share of their net income of 6.9% on average. But policies protected household incomes to a substantial degree: compared to the drop in net income, GDP per capita fell by 18.9% between the first and second quarter of 2020. Earnings subsidies (the Coronavirus Job Retention Scheme) protected household finances and provided the main insurance mechanism during the crisis. Besides subsidies, Covid-related increases to state benefits, as well as the automatic stabilisers in the tax and benefit system, played an important role in mitigating the income losses. However, analysing the impact of a near-decade of austerity on the UK safety net, we find that, compared to 2011 policies, the 2020 pre-Covid tax-benefit policies would have been less effective in insuring incomes against the shocks. We also assess the potential distributional impact of introducing a Universal Basic Income (UBI) instead of the Covid emergency measures and find that a UBI would have supported the incomes of different vulnerable groups but would have provided less protection to those hit hardest by the labour market shocks. Supplementary Information: The online version contains supplementary material available at 10.1007/s10888-021-09491-w.
44 citations
TL;DR: In this paper, a topic model was used to fit 40,927 COVID-19-related paragraphs in 3,581 earnings calls over the period Jan. 22-Apr. 30, 2020.
Abstract: After fitting a topic model to 40,927 COVID-19–related paragraphs in 3,581 earnings calls over the period Jan. 22–Apr. 30, 2020, we obtain firm-level measures of exposure and response related to COVID-19 for 2,894 U.S. firms. We show that despite the large negative impact of COVID-19 on their operations, firms with a strong corporate culture outperform their peers without a strong culture. Moreover, these firms are more likely to support their community, embrace digital transformation, and develop new products than those peers. We conclude that corporate culture is an intangible asset designed to meet unforeseen contingencies as they arise.
43 citations
TL;DR: In this paper, the impact of COVID-19 on 42,401 UK SMEs and how government intervention affects their capability to survive the pandemic was investigated and the results showed that weaker firms benefit more than strong ones.
Abstract: We investigate the impact of COVID-19 on 42,401 UK SMEs and how government intervention affects their capability to survive the pandemic. The results show that, without governmental mitigation schemes, 59% of UK SMEs report negative earnings and that their residual life is reduced from 164 to 139 days. The analysis shows that government support scheme reduces the number of SMEs with negative earnings to 49% and allows extending the residual life for SMEs with negative earnings to 194 days. In addition, the support scheme reduces the number of jobs at risk in our sample by around 20%. However, our results suggest that weaker firms benefit more than strong ones. Besides, industries that are worst hit by COVID-19 are not those that benefit most from the government support scheme. We ascribe this result to the fact that the schemes do not discriminate between those firms that deserve support and those that do not deserve it.
TL;DR: The authors found that the Italian system has significant costs in terms of forgone aggregate earnings and employment because it generates a spatial equilibrium where workers queue for jobs in the South and remain unemployed while waiting.
Abstract: Italy and Germany have similar geographical differences in productivity – North more productive than South in Italy; West more productive than East in Germany – but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local wage adjustments, while Germany has moved toward a more flexible system that allows for local bargaining. The Italian system has significant costs in terms of forgone aggregate earnings and employment because it generates a spatial equilibrium where workers queue for jobs in the South and remain unemployed while waiting. Our findings are relevant for other European countries.
TL;DR: In this paper, the authors evaluate the attractiveness of startup employment using both what startups pay and the implications of these jobs for earnings trajectories, using Danish registry data, and find that the payoff of a startup worker is positively correlated with the earnings of the entire workforce.
Abstract: Evaluating the attractiveness of startup employment requires an understanding of both what startups pay and the implications of these jobs for earnings trajectories. Analyzing Danish registry data,...
TL;DR: In this paper, the authors examine how economic policy uncertainty (EPU) affects accounting quality and find that accounting quality, measured based on Nikolaev's (2018) model, increases during periods of high policy uncertainty.
Abstract: Using data from 19 countries over the 1990–2015 period, we examine how economic policy uncertainty (EPU) affects accounting quality. We find that accounting quality, measured based on Nikolaev’s (2018) model, increases during periods of high policy uncertainty. This relation is confirmed by the negative association between EPU and performance-adjusted discretionary accruals in a multivariate setting, and it extends to various alternative measures of earnings properties. We also find that the positive relation between EPU and accounting quality is more pronounced for government-dependent firms and firms with higher political risk. Additional analyses based on institutional investors’ trading behavior, media freedom, and press circulation suggest that market participants’ attention is a mechanism through which EPU affects accounting quality. Further, we find evidence that high accounting quality can mitigate the negative effects of EPU on corporate investment and valuation.
TL;DR: This paper examined whether exogenous and extremely negative events, such as terrorist attacks and mass shootings, influence the sentiment and forecasts of sell-side equity analysts and found that analysts were more concerned about negative events than positive ones.
Abstract: We examine whether exogenous and extremely negative events, such as terrorist attacks and mass shootings, influence the sentiment and forecasts of sell-side equity analysts. We find that analysts w...
TL;DR: This article studied the impact of trade exposure on the job biographies of 24 million manufacturing workers in Germany and found that rising export opportunities lead to two equally important sources of earnings gains: on
Abstract: We study the impact of trade exposure on the job biographies of 24 million manufacturing workers in Germany Rising export opportunities lead to two equally important sources of earnings gains: on
TL;DR: In this paper, the authors investigated the earnings management phenomenon in the context of Central European countries, attempting to identify the factors and incentives that can influence earnings management behavior on a sample of 8,156 enterprises from Slovakia, the Czech Republic, Hungary, and Poland.
Abstract: Research background: The paper investigates the earnings management phenomenon in the context of Central European countries, attempting to identify the factors and incentives that can influence earnings management behavior on a sample of 8,156 enterprises from Slovakia, the Czech Republic, Hungary, and Poland.
Purpose of the article: The main purpose of the manuscript is to prove that there are significant differences in earnings management practices (measured by discretionary accruals) across the countries and to find the firm-specific features that influence the way enterprises manage their earnings.
Methods: The modified Jones model was used to calculate the discretionary accruals, which are further analyzed across the countries. The statistically significant differences were confirmed across the countries. Thus, the impact of the economic sector, firm size, firm age, legal form, and ownership structure on earnings management behavior is studied by the Kruskal-Wallis test. The Dunn-Bonferroni post hoc tests then revealed the significant differences across the categories of the investigated earnings management determinants. To find the association between the particular earnings management practice (income-increasing or income-decreasing manipulation), correspondence analysis was used to visualize the mutual relations.
Findings & value added: The results of the realized investigation revealed that the economic sector is one of the most important earnings management determinants, as its statistical significance was confirmed in each analyzed country. The correspondence analysis determined specific sectors, where income-increasing manipulation with earnings is practiced (NACE codes F, J, K, M, N), and vice versa, income-decreasing earnings management is characteristic for enterprises in sectors A, C, D, G or L. In specific economic conditions, firm size is also a relevant indicator (Hungary), or firm age and legal form and ownership structure (Poland). The recognition of crucial earnings management incentives may be helpful for authorities, policymakers, analysts and auditors when identifying various techniques and practices of earnings manipulation which could vary across the sectors and taking necessary measures to mitigate potential financial risks.
TL;DR: The authors showed that helping young job-seekers signal their skills to employers generates large and persistent improvements in their labour market outcomes, by comparing an intervention that improves the ability to signal skills (the "job application workshop" to a transport subsidy treatment designed to reduce the cost of job search.
Abstract: We show that helping young job-seekers signal their skills to employers generates large and persistent improvements in their labour market outcomes. We do this by comparing an intervention that improves the ability to signal skills (the ‘job application workshop’) to a transport subsidy treatment designed to reduce the cost of job search. In the short-run, both interventions have large positive effects on the probability of finding a formal job. The workshop also increases the probability of having a stable job with an open-ended contract. Four years later, the workshop significantly increases earnings, job satisfaction, and employment duration, but the effects of the transport subsidy have dissipated. Gains are concentrated on individuals who generally have worse labour market outcomes. Overall, our findings highlight that young people possess valuable skills that are unobservable to employers. Making these skills observable generates earnings gains that are far greater than the cost of the intervention.
TL;DR: In this article, the authors explore the implications of investor distraction for earnings management and find that firms with distracted institutional shareholders engage more in both accrual-based and real earnings management.
TL;DR: In this article, a structural model of reference dependence in taxi drivers' daily labor-supply behavior is presented, in which drivers work toward a reference point that adjusts to deviations from expected earnings with a lag.
Abstract: This paper provides field evidence on how reference points adjust, a degree of freedom in reference-dependence models. Examining this in the context of cabdrivers' daily labor-supply behavior, we ask how the within-day timing of earnings affects decisions. Drivers work less in response to higher accumulated income, with a strong effect for recent earnings that gradually diminishes for earlier earnings. We estimate a structural model in which drivers work toward a reference point that adjusts to deviations from expected earnings with a lag. This dynamic view of reference dependence reconciles conflicting "neoclassical" and "behavioral" interpretations of evidence on daily labor-supply decisions.
TL;DR: The authors showed that when poor households are spatially concentrated, transfers from one location to another can yield equity gains that outweigh their efficiency costs, even when income-based transfers are set optimally Expressions for the optimal transfer size depend on the mobility of households, the earnings responses of movers, and sorting patterns.
Abstract: Governments around the world redistribute to distressed areas by conditioning taxes and transfers on location We show that when poor households are spatially concentrated, transfers from one location to another can yield equity gains that outweigh their efficiency costs, even when income-based transfers are set optimally Expressions for the optimal transfer size depend on the mobility of households, the earnings responses of movers, and sorting patterns Surveys find support for targeting tax credits to poor Americans who live in distressed places A calibration exercise finds optimal transfers of the same order of magnitude as prominent American zone policies
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TL;DR: This paper examined the impact of SEC comment letters on future financial reporting outcomes and earnings credibility and identified topics associated with the textual and quantitative classifications of importance, providing insights into the factors that draw investor attention and that relate to future restatements and write-downs.
Abstract: This study examines the impact of SEC comment letters on future financial reporting outcomes and earnings credibility. Naive Bayesian classification identifies comment letters associated with future restatements and write-downs. An investor attention-based quantitative measure of importance, using EDGAR downloads, also predicts these outcomes. Disclosure-event abnormal returns, revenue recognition comments, and the number of letters in a conversation appear to be useful quantitative metrics for classifying importance in certain settings. This study also documents trends in comment letter topics over time and identifies topics associated with the textual and quantitative classifications of importance, providing insights into the factors that draw investor attention and that relate to future restatements and write-downs. Innocuous comment letters are associated with improvements in earnings credibility following comment letter reviews.
TL;DR: A self-administered survey to ride-hailing drivers in Chile showed that the flexibility to choose work times is the most appreciated attribute of this job, even though most drivers follow a somewhat fixed routine each week as discussed by the authors.
Abstract: Ride-hailing (ridesourcing) companies such as Uber, Lyft, and Didi Chuxing have been a disruptive force in the urban mobility landscape around the world during the past decade In this paper, we analyse the working conditions, earnings, and job satisfaction of ride-hailing drivers We begin by discussing the regulatory, labour, financial, and urban mobility effects of ride-hailing companies Then, we present the results of a self-administered survey to ride-hailing drivers in Chile, which is complemented with the use of online tools for the estimation of driving earnings Our findings show that the flexibility to choose work times is the most appreciated attribute of this job, even though most drivers follow a somewhat fixed routine each week By contrast, the level of transparency with which ride-hailing apps determine driver pay is the attribute with the lowest satisfaction score A large number of respondents drive for long daily and weekly periods, which is a health and safety hazard Current drivers are not concerned about the future deployment of driverless vehicles for on-demand mobility services Ordered probit models for job satisfaction show that ride-hailing was better evaluated by drivers who use it as a complement to another part-time job, by those who earn more money per week, and by those who have not experienced undesirable situations while working, such as harassment or traffic crashes
TL;DR: The top quartile of the income distribution accounts for almost half of the pandemic-related decline in aggregate consumption, with expenditure for this group falling much more than income as discussed by the authors.
TL;DR: In this paper, the authors investigate an externality of earnings pressure from capital markets, defined as managers' incentives to meet or beat earnings expectations, and find that firms with earnings pressure have higher emissions.
TL;DR: In this paper, the extent to which information and communications technology (ICT) is used by different types of self-employed individuals and how it affects their earnings is explored, and an indirect negative inertia effect of job tenure (i.e., entrepreneurs who have been running their business for a relatively long period of time) on earnings is found.
TL;DR: In this article, the authors analyzed the relationship between earnings management and corporate social responsibility and found that managers from more socially responsible companies have a more ethical behavior and, thus, financial reporting of higher quality.
Abstract: This study analyses the relationship between earnings management and corporate social responsibility. To this end, we use a sample of 568 listed companies from the European Union between 2010 and 2018. We use discretionary accruals as the measure of earnings management, under the Modified Jones model. Corporate social responsibility is proxied by the Combined Environmental, Social and Governance Score from the ASSET4 database. We find a negative relation between earnings management and corporate social responsibility, suggesting that managers from more socially responsible companies have a more ethical behavior and, thus, financial reporting of higher quality. Additional analysis provides evidence that economic cycles and financial performance play important roles in the relation between earnings management and corporate social responsibility. During periods of crisis or of losses, the relationship is positive, suggesting that under unfavorable economic conditions, management makes opportunistic use of a sustainable company’s status to manage earnings.
01 Sep 2021
TL;DR: In this article, the extent to which financial liquidity and financial solvency influenced the performance of 34 healthcare companies that are publicly traded on the New York Stock Exchange was analyzed over a period spanning from Q4 2005 to Q4 2020.
Abstract: Any lucrative economic activity implies aiming at obtaining a profit, including companies in the healthcare industry. The present study analyzes the extent to which financial liquidity and financial solvency influenced the performance of 34 healthcare companies that are publicly traded on the New York Stock Exchange. The period of analysis spanned from Q4 2005 to Q4 2020. The research methodology favored a complex approach by running econometric models with two-stage least squares (2SLS) panel and panel generalized method of moments (GMM). Empirical evidence showed that the financial indicators current liquidity ratio, quick liquidity ratio, and debt to equity ratio significantly influenced company performance measured by return on assets, gross margin ratio, operating margin ratio, earnings before interest, tax, depreciation, and amortization. Strategies intended to improve business performance based on liquidity and solvency insights are also addressed.
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TL;DR: In this paper, the authors provide causal evidence of the immediate and near-term impact of stringent COVID-19 lockdown policies on employment outcomes, using Ghana as a case study.
Abstract: In this paper, we provide causal evidence of the immediate and near-term impact of stringent COVID-19 lockdown policies on employment outcomes, using Ghana as a case study We take advantage of a specific policy setting, in which strict stay-at-home orders were issued and enforced in two spatially delimited areas, bringing Ghana's major metropolitan centres to a standstill, while in the rest of the country less stringent regulations were in place Using a difference-in-differences design, we find that the three-week lockdown had a large and significant immediate negative impact on employment in the treated districts, particularly among workers in informal self-employment While the gap in employment between the treated and control districts had narrowed four months after the lockdown was lifted, we detect a persistent nationwide decline in both earnings and employment, jeopardizing particularly the livelihoods of small business owners mainly operating in the informal economy
TL;DR: In this article, the authors estimate the short and long-run labor market impacts of parenthood in a developing country, Chile, based on an event-study approach around the birth of the first child and find that becoming a mother implies a sharp decline in employment, working hours, and labor earnings, while fathers' outcomes remain unaffected.