Financial Reporting and Employee Job Search

72 Pages Posted: 28 Jun 2021

See all articles by Ed deHaan

Ed deHaan

University of Washington - Michael G. Foster School of Business

Nan Li

University of Toronto - Rotman School of Management; University of Toronto at Scarborough - Division of Management

Frank Zhou

University of Pennsylvania - The Wharton School

Date Written: June 16, 2021

Abstract

We investigate the effects of financial reporting on current employee job search; i.e., whether firms' public financial reports cause their employees to reevaluate their jobs and consider leaving. We develop a simple model in which current employees use earnings announcements to inform job search decisions, and empirically measure job search based on employees' activity on a popular job market website. We find that job search by current employees increases significantly during earnings announcement weeks, especially when employees are more mobile and when within-firm information frictions are greater. We also find that employees use earnings announcements to update their expectations about their employers' economic prospects, consistent with learning. Our paper contributes to the burgeoning labor and accounting literature by providing among the first evidence closely linking financial reports to employee learning and job search.

Keywords: Financial Reporting; Employee Turnover; Labor Mobility; Job Search; Earnings Announcements; Employee Learning; Glassdoor

JEL Classification: G14, J62, J63, M41

Suggested Citation

deHaan, Ed and Li, Nan and Zhou, Frank, Financial Reporting and Employee Job Search (June 16, 2021). Available at SSRN: https://ssrn.com/abstract=3868281 or http://dx.doi.org/10.2139/ssrn.3868281

Ed DeHaan

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Nan Li

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-3126 (Phone)

University of Toronto at Scarborough - Division of Management ( email )

1265 Military Trial
Scarborough, Ontario M1C 1A4
Canada

Frank Zhou (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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