Income Smoothing due to Unemployment Concerns

• Main Authors: NG, Jeffrey, RANASINGHE, Tharindra, SHI, Guifeng, YANG, I-Hwa
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2015
• Subjects: Income Smoothing; Unemployment insurance; Accounting; Labor Economics
• Online Access: https://ink.library.smu.edu.sg/soa_research/1428; https://ink.library.smu.edu.sg/context/soa_research/article/2427/viewcontent/SSRN_id2528972.pdf
• Institution: Singapore Management University

Economic theory predicts that top executives and lower-level employees have incentives to smooth income due to compensating wage differential costs and fear of job loss, respectively. Following Agrawal and Matsa (JFE, 2013) who rely on exogenous variations in unemployment insurance benefits to exami...