Whereas the effect of motherhood on women’s earnings has been well documented, little research has been done in Canada exploring the impact of fatherhood on men’s earnings. Although international research has shown that, unlike women, men who have a child increase their earnings, a growing body of research suggests that this benefit may be mediated by whether or not the father takes a parental leave. Using the 2011 General Social Survey (GSS) on family issues and employing ordinary least squares regression I investigate whether fathers receive an earnings bonus compared to childless men and whether fathers who take paternity/ parental leave earn less than fathers who do not. Our findings show that after controlling for personal and work related characteristics fathers earn significantly more than childless men and fathers who took paternity/parental leave earn significantly less than fathers who did not. Potential explanations for these earnings gaps are discussed.

In recent years, there has been a global trend of adopting International Financial Reporting Standards (IFRS). In 2011, Canada joined this trend by implementing mandatory IFRS adoption for publicly traded firms. Proponents of IFRS adoption claim that it will benefit investors by improving comparability and transparency of firms. At the same time, research on family firms has seen increasing focus. Because of family ties to the firm, family firms can exhibit different motivations, behaviours and performance than do non-family firms. In this research, I attempt to gain insight on the effects of IFRS adoption for a unique set of firms, namely publicly traded family firms by examining the effect of IFRS adoption on earnings informativeness. Although previous literature examines the economic consequences of IFRS adoption, my study is the first to my knowledge that examines IFRS adoption effects on the unique set of family firms. I run a pooled regression to examine the effects of IFRS adoption on earnings informativeness. I find that IFRS adoption by Canadian family firms is associated with a statistically significant higher level of earnings informativeness. The findings of this research could have implications for standard setters, minority shareholders of family firms, and academic researchers.

The goal of this diploma thesis "Aggressive earnings management in publicly traded companies and its impact on share prices" is to connect an interesting topic of earnings management, which is part of a wider group -- financial fraud, with specific impact on the capital market. This thesis includes identification and quantification of the impact on a well known case of corporate fraud -- Enron. First part of the thesis describes and discusses the topic earnings management including its definition, motivation, tests, connected risk and legislation. Second part discusses share valuation techniques -- relative and absolute methods, which will be used in the last part. Last part of the thesis, using the well known case of earnings management -- Enron, quantifies the extent of earnings management, its impact on share prices and total damages caused to investors.

In 2005, international accounting standards changed the treatment of goodwill, by replacingannual amortisation with impairment tests of goodwill. This has created a heated debate inaccounting research. Scholars are split whether the switch to impairment tests have increasedor decreased both accounting and audit quality. The subjective nature of impairment tests,deriving from being based on fair values and estimations have resulted in a rise of studiescovering its potential shortcomings.Main issues with impairment tests have been related to its possible impact on increase inearnings management (EM) engagement, dependence on estimations and discretionaryproblems. There are many surrounding questions regarding goodwill and EM, along with thecurrent goodwill rules being subject to criticism. This study aims to investigate further therelationship between goodwill and EM, as well as exploring the perception auditors haveregarding that topic and the related accounting standards. Moreover, we aim to get a betterunderstanding about the role the auditor possesses in both enabling and preventing EMactivities in private firms and public firms.Following a qualitative approach, this study explores previous literature within the field ofgoodwill and EM in addition to using 7 in-depth and semi-structured interviews withprofessionals in the audit industry based in Sweden and Luxembourg. Overall, we find auditorsto clearly be in favour of impairment tests compared to using amortisation of goodwill. Inregards to the risk of EM, the potential benefits of impairment tests outweigh the subjectiveissues according to the interviewed auditors. Furthermore, it seems like the verifiabilityproblem of impairment tests is more an issue in theory than in practice. The majority of theauditors believes the introduction of impairment tests of goodwill increased the accountingquality and did not significantly impact the audit quality, even if it gives auditors morechallenges in the audit tasks. In addition, the importance and prevalence of EM within goodwillbetween private and public firms had inconclusive results between the interviewees. Furtherresearch may investigate using a larger sample whether impairment tests are at the origin of anincrease of EM and comparing private and public firms.

The world has witnessed a series of corporate accounting scandals. Earnings management, as a phenomenon at the core of these scandals, is one of the main challenges confronting the effectiveness of different monitoring mechanisms such as corporate governance. Recently, and more precisely after the financial crises of 2008 2009, Jordan has shown substantial interest in integrating the pillars of corporate governance. Therefore, this research examines the effect of corporate governance mechanisms on earnings management activities among all publicly listed commercial banks on the Amman Stock Exchange (ASE) during the period 2013-2018. Earnings management was measured by the modified Jones’ model. The characteristics examined are board size, CEO duality, board independence, managerial ownership, institutional ownership, audit committee size, audit committee independence and audit committee activity. In addition, two control variables have been used: firm size and firm performance. The findings of the study reveal that earnings management has a significant positive relationship with both board size and institutional ownership, and a significant negative relationship with total assets.

Abstract  This study investigates the native-immigrant earnings differential in self-employment and wage employment in Sweden. The main research question is whether the earnings differential between immigrants and natives differs when immigrants are self-employed. Thereafter, we want to be able to find a critical conclusion in which we can explain the increase or decrease in the different earning groups. Sweden is one of the multinational countries in Europe with a rapidly growing immigrant population. The question that was studied in this essay is analyzed in many ways by economists and researchers. Many previous research discuss the immigrant’s employment propensities and whether immigrants earn more or less in self-employment compared to wage-employment in the labor market.  Theories such as human capital, discrimination and many more, not only explain immigrants’ earnings in the labor market but even discuss the reasons. In our essay we focus on immigrants' earnings relative to natives’. We collected integrated data from the European Social Survey (ESS) between years 2002 - 2018. In the study, we applied the ordinary least squares (OLS) method and conducted immigrants as a dummy variable. Our results suggest that immigrants earn 1.2% lower in self-employment and 9.3% lower in wage-employment relative to natives. Although immigrants earn less than natives in both sectors.  This difference is smaller when immigrants are self-employed. Our results can be supported theoretically that immigrants might be exposed to discrimination in a lower degree in self-employment than wage-employment. Additionally, immigrants might choose to be self-employed to avoid lower earnings in wage employment

Covid-19-pandemin slog till över världen under 2020. Pandemin påverkade alla möjliga yrken, inte minst revisionsyrket. Revision av varulager kräver fysisk närvaro från revisorn (ISA 501), något som revisorerna lyckades uppnå till stor del, men inte fullt ut under covid -19-pand emin. Trot s at t revisorerna lyckad es upprät t hålla kravet på f ysisk delaktighet vid inventering till stor del under 2020, medföljde en hel del omställningar i form av ökad digital kommunikation inom team, och mer omfattande riskanalyser.  Syftet med studien är att se till om manipulationen ökat genom att se till om företag har redovisat ett större, oförändrat, eller mindre värde på varulagret under pandemin jämfört med innan. Studien undersöker huruvida det finns tendenser till om företag ökade utförandet av manipulation av varulagret under covid-19-pandemin. Detta genom att jämföra värderingen av varulagret mellan olika år och populationer. Året 2020 definieras som coronaår, medan åren 2016, 2017, och 2018 används som jämförande år innan pandemins utbrott. Den primära populationen, vilken är huvudfokus, som undersöks är de revisionspliktiga företagen med kalenderåret som räkenskapsår.  De tre hypoteserna som argumenteras fram ställer varulagrets värde dels självständigt, dels i förhållande till två mått nära relaterade till varulagret, nettoomsättning samt totala omsättningstillgångar. Varpå vi kunde se ett signifikant samband mellan covid-19- pand emin och en f öränd ring i varulagret s värd e i f örhålland e t ill t ot ala omsättningstillgångar. I övrigt kunde vi även se en ökad tendens till earnings management hos företag som använder sig av en revisionsbyrå som inte är att klassa som en Big-7 byrå. En intressant observation är även att varulagret under covid-19-pandemin generellt sett tenderade att minska, då det kunde ses ett negativt samband mellan varulagrets värde och pandemin. Förutom för delpopulationen som klassas som ekonomiskt utsatta företag dock. Dessa företag visade tendenser till att redovisa ett högre värde under covid-19- pandemin. Vilket förtydligar gruppernas olika incitament till varför manipulation av varulagret skulle kunna utföras. En anledning till att värdera ner varulagrets värde kan vara för att komma åt eventuella bidrag och stöd (Ozili, 2021), medan ett incitament till att övervärdera varulagret kan vara att öka resultatet (Lassoued & Khanchel, 2021).  En slutsats av denna studie är därmed att vi kan se en viss tendens till en förändring i varulagrets värdering som kan bero på ökad manipulation och earnings management på varulagret. Samt att riktningen på manipulationen, högre eller lägre värde, tenderar att variera beroende på incitamenten hos företagen.

Thesis advisor: Donald Cox / This dissertation consists of three related chapters. A unifying feature throughout all is a focus on the role of regional earnings distributions, especially at the Commuting Zone level, in driving social and economic behavior. The first chapter examines the role of women's and men's expected earnings, across Commuting Zones, in driving women's and men's location choices (migration). The second chapter, a collaboration with Lia Yin, examines the roles of the upper and lower tails of the earnings distribution in driving crime rates, with a key distinction made between crimes motivated primarily by emotional gain, and those motivated by financial gain. Both chapters one and two use simple structural models, identified by Shift-Share (Bartik) instruments as instrumental variables. The third chapter delves into the history, meaning, and scope of Shift-Share instruments, develops several new variants, and tests them in an application to measuring effects of earnings inequality single parenting rates. The first chapter, "How Women and Men Choose Where to Live Based on Each Other's Expected Earnings," considers how the distribution of earnings between genders may influence the distribution of the population via internal migration. Might the earnings potential of prospective spouses drive migration choices? Migrants who flock to places with high-earning prospective partners can cause sex ratios to become unbalanced. Shortages of men have been shown to increase rates of single parenting, and shortages of women to increase crime. Past attempts to answer this question have been limited to brief windows in time, and have lacked causal identification. I build a 7-decade panel of U.S. Commuting Zones from Census and American Community Survey data, computing gender-specific Shift-Share (Bartik) instruments in order to isolate exogenous variation in women's and men's expected earnings. I find that both women and men place at least twice as much priority weight on men's expected earnings as they do on women's, indicating a gender asymmetry in preferences. This asymmetry slightly erodes over time from 1970 to 2019, consistent with a shift in norms. Because women and men prioritize men's earnings over women's by about the same amount, gender differences in earnings play little role in driving sex ratio imbalance. However, women place more weight than men do on the sum of women's and men's earnings, so that the ratio of women to men increases by about 1% per 10% increase in earnings. More balanced sex ratios may follow from policies that reduce overall (gender neutral) inequality, such as between urban and rural areas. The second chapter, "The Distinct Roles of Poverty and Higher Earnings in Motivating Crime," considers how the two extremes of the earnings distribution bear upon people's propensity to turn to crime. Does inequality lead to more crime? We develop a new model that articulates how Poverty (the lower tail of the earnings distribution) and Earnings (the upper tail) enter into equilibrium crime rates. In our model, individuals in Poverty have less to lose in the context of criminal punishment, so are less averse to committing crimes in general. The presence of high Earnings (therefore things worth stealing) heightens the expected gain to offenders per crime - but specifically in terms of financial gain, not emotional gain. We estimate our model on a comprehensive panel of U.S. Commuting Zones (1980-2016), deploying novel Shift-Share instruments to correct for reverse causality (of crime on the earnings distribution). Corroborating our hypothesis, we find that high Earnings plays a much larger role in driving crimes that yield financial gain to the offender (various forms of theft) than it does for crimes of emotional gain; while Poverty is a driving force equally across both types of crime. In each case, not accounting for reverse causality would underestimate both effects, often by more than double. The third and final chapter, "Novel Shift-Share Instruments and Their Applications," digs deeper into the topic of Shift-Share (Bartik) instruments, which are vital in both of the earlier chapters. Shift-Share instruments are among the most important tools for causal identification in economics. In this paper, I crystallize main ideas underlying Shift-Share instruments - their core structure, distinctive claim to validity as instruments, history, uses, and wealth of varieties. I argue that the essence of the Shift-Share approach is to decompose the endogenous explanatory variable into an accounting identity with multiple components; preserve that which is most exogenous in the accounting identity, and neutralize that which is most endogenous. Following this framework, I show clearly how several variants in the literature are related. I then develop formulas for several new variants. Particularly, I show how to develop Shift-Share instruments for distribution summaries beyond the mean - the variance, skew, absolute deviation around a central point, and Gini coefficient. As an empirical application that highlights the themes of the paper, I measure the effect of earnings inequality on rates of single parenting in the U.S., comparing results using each of various alternative instruments for the Gini coefficient. / Thesis (PhD) — Boston College, 2022. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

This dissertation is an empirical investigation into the distributive effects of overand under-education, defined as market outcomes such that some workers possess skills over or below those required at their jobs respectively. This type of market failure can arise in assignment and search equilibrium settings, as well as in the presence of asymmetric information regarding workers' performance on the job. The existence of permanent and sizable mismatch rates means that returns to education are depressed for over-educated workers and in ated for under-qualified workers. Thus, irreversible decisions to invest in human capital are made in a context of uncertainty regarding the exact outcomes that might arise. As in the Todaro model, where individuals decide whether to migrate to cities based on the expected values of the available alternatives, workers might decide it is worthwhile to keep investing in education even if the probability of finding appropriate employment is falling. The three chapters of the dissertation are entitled: Skill Mismatch and Earnings: A Panel analysis of the U.S. Labor Market," Earnings Inequality and Skill Mismatch in the U.S: 1973-2003," and Employment and Distribution Effects of Changes in the Minimum Wage." Skill Mismatch and Earnings: A Panel analysis of the U.S. Labor Market This chapter examines the effect on earnings induced by a mismatch between workers' skills and the skills actually required on the job. It uses the Current Population Survey (CPS) for the period 1983-2002. The special re-interview methodology of the CPS is used to create a large panel, so that individual heterogeneity can be controlled for. Skill requirements are estimated by the median education level for each 3-digit occupation in the 1980 census occupational classification. The analysis, including the determination of skill requirements, is conducted for males and females separately. Cross-sectional analysis confirms the findings in the recent literature. Returns to required schooling are higher than the returns to attained education in standard earnings regressions. Also, for workers with similar educational attainment, over-education reduces earnings and under-education increases them. Contrary to what other studies have found, we conclude that these results are confirmed after controlling for individual fixed effects. The chapter also investigates which groups are more exposed to mismatch. I use standard probit analysis with over-education and under-education as the respective dependent variables. Women, service sector, and non-unionized workers appear to have higher probabilities of mismatch. Earnings Inequality and Skill Mismatch This chapter shows that skill mismatch is a significant source of inequality in real earnings in the U.S. and that a substantial fraction of the increase in wage dispersion during the period 1973-2002 was due to the increase in mismatch rates and mismatch premia. Standard human capital earnings regressions that do not decompose the education variable into required, surplus, and deficit years provide biased estimates of the relative importance of education in explaining earnings inequality. In 2000-2002 surplus and deficit qualifications taken together accounted for 4:3 and 4:6 percent of the variance in earnings, or around 15 percent of the total explained variance. The dramatic increase in over-education rates and premia accounts for around 11 and 32 percent of the increase in the coeffcient of variation of log earnings during the 30 years under analysis for males and females respectively. Residual inequality is slightly diminished when the estimating equation allows the prices of surplus, required and deficit qualifications to differ but the well-studied increasing trend of within-group inequality remains otherwise unchanged. Changes in the composition of the labor force are found to be important predictors of increasing residual inequality even when skill mismatch is taken into account. The Distributive Effects of the Minimum Wage: an Effciency Wage Model with Skill Mismatch (co-authored with Peter Skott) This chapter analyzes the effect of changes in the real value of the minimum wage on the wage distribution. Changes in the minimum wage and other labor market institutions affect workers in all groups and empirically appear to be good complement to standard supply and demand arguments in explaining overall inequality. We use an effciency wage model but allow for mismatch between jobs and workers. This framework yields predictions not only on the skill premium but also on the extent of inequality within groups. To keep matters as simple as possible, we assume that high-skill workers can get two types of jobs (good and bad), whereas low-skill workers have only one type of employment opportunity (bad). As long as some matches of high-skill workers and bad jobs are sustained in equilibrium, changes in the exogenous variables will affect not only wages and employment rates but also the degree of mismatch. Thus, this paper shows that `over-education' can be generated endogenously in effciency wage models and that a fall in the real value of the minimum wage can (i) reduce total employment, (ii) lead to a simultaneous decline in both the relative employment and the relative wage of low-skill workers, and (iii) produce a rise in within-group as well as between-group inequality. Evidence from the US suggests that these theoretical results are empirically relevant.

Det finns en osäkerhet kring goodwillnedskrivningar i och med det finns utrymme för företagsledningen att påverka antagandena för goodwillvärdet med företagsledningens egna uppskattningar och subjektiva bedömningar. Mycket av forskningen som förklarar varför goodwillnedskrivningar genomförs har inte gjorts i en svensk kontext. Studiens syftet är att undersöka om svenska börsnoterade företags goodwillnedskrivningar kan förklaras av att företagsledningen har använt Earnings Management. Metoden studien använde var en kvantitativ forskningsstrategi med en deduktiv ansats. Studien har sekundärdata i form av årsredovisningar från företag noterade på Stockholmsbörsen använts. Studiens resultat stödjer endast  skuldsättningshypotsesen som är grundad i PAT. Goodwillnedskrivningar i Sverige kan därmed förklaras utifrån vilken skuldsättningsgrad företag har. Det leder till att goodwillnedskrivningar kan delvis förklaras av ett opportunistiskt beteende. Detta stöds även av kontrollvariablerna ROA och GW/TT. De övriga sex hypoteser förkastas eftersom de inte kan förklara genomförandet av goodwillnedskrivningar i Sverige under 2018–2021. Studiens kunskapsbidrag är att öka förståelsen kring vilka faktorer som kan förklara goodwillnedskrivningar under räkenskapsåren 2018–2021.