Determinants Of Earnings Research Articles

Personal Earnings in Pakistan: Role of Information Communication Technology (ICT) and Livelihood Diversification

The determination of factors explaining personal earnings has remained a matter of great interest among economists. This study explores important socioeconomic and demographic factors affecting personal earnings in Pakistan with a special focus on the contribution of ICT usage and livelihood diversification. Ordinary Least Squares (OLS) regression models have been estimated using the most recent available PSLM (2019-20) data published by the Pakistan Bureau of Statistics (PBS). After careful screening, the data has been restricted to only those individuals who earn either through farm, non-farm, or diversified livelihoods. The results suggest that the use of ICTs has a significant contribution to the earnings in Pakistan. Similarly, livelihood diversification i.e., participating in both farm and non-farm employment activities can greatly improve personal earnings. The non-farm sector also remarkably supports the agriculture-based Pakistan’s economy. Especially, the small landholders have to inevitably search for additional livelihood sources as risk coping strategy. Education is found one of the most important determinants of personal earnings. It is suggested that measures should be taken to improve access to ICTs and internet facilities at the national level with a special focus on the most backward areas. Moreover, the government may acknowledge and support the livelihood diversification strategies as a component of the national objective for job creation. Stringent efforts are recommended to ensure the provision of free and quality education for all with equal opportunities.

Follow the leader? The long‐run interaction between public and private sector wage growth in the UK

AbstractWith one‐fifth of the UK labour force employed in the public sector, public sector pay and its interaction with private sector pay is an important driver of the macroeconomy. Using new data on sector‐level earnings and sector–industry‐level pay settlements, this paper addresses the fundamental question of which sector leads and which follows in terms of earnings determination. We find that in the long run, public sector wages adjust to wages set in the private sector, maintaining a consistent relationship. We further find that there can be significant wage spillovers from the public sector to the private sector in the short run. These tend to be more pronounced for private sector industries that are domestically facing, characterized by low worker bargaining power, or reliant on public sector inputs. This paper's findings have important implications for macroeconomic policy that aims to balance inflationary forces and fiscal funding pressures.

The Role of Human Capital and Regional Effects on Earnings: Multilevel Mixed Effect Regression Approach

Indonesia has an abundant labor supply, so examining the determinants of earnings that reflect labor productivity is essential. This study is keen to estimate the effect of human capital, demographic factors, and regional (Regency/City) effects on workers' earnings in the Province of Central Java in 2022. The data is collected from the National Labor Force Survey (Sakernas). The multilevel mixed-effect regression is employed to assess the effect of individual characteristics and district-level variation on earnings. The study found that human capital, demographic factors, and regional (Regency/City) effects significantly affect earnings. Education and training are essential to improve workers’ skills, leading to higher performance. Further, regional characteristics have contributed to explaining earnings variation across workers in Central Java.

Do Higher State Minimum Wages Reduce the Racial Wage Gap for Men?

Using data from the 2019 Current Population Survey, we find that black, non-Hispanic men who reside in states with the highest minimum wages (above $10 in 2018) have a slightly smaller wage gap relative to white, non-Hispanic men. However, wage regressions show no appreciable improvement in the relative earnings of black men in states with minimum wages that exceed the federal level when accounting for other demographic determinants of earnings. Our results indicate that increasing a state’s minimum wage does not appear to be an effective policy tool to reduce racial wage inequality for men.

How big data features drive financial accounting and firm sustainability in the energy industry

PurposeThis study aims to scrutinize the relationship between the perception of big data (BD) features and the primary outcomes of financial accounting. Likewise, it explores whether financial accounting practices moderate the relationship between BD features and firm sustainability.Design/methodology/approachThe study used a questionnaire survey based on the Likert scale for two distinct groups of participants: academic scholars and industry practitioners operating in the BD era within the energy sector.FindingsThe results reveal significant positive associations between BD features and firm performance, reporting quality, earnings determinants, fair value measurements, risk management, firm value, the efficiency of the decision-making process, narrative disclosure and firm sustainability. Besides, the path analysis indicates an indirect impact of BD on firm sustainability via financial accounting practices. The results suggest that energy firms should consider incorporating BD analysis into their financial accounting processes to improve their sustainability performance and create long-term value for their stakeholders.Practical implicationsThe findings are particularly interesting to academics in accounting and business to improve the accounting curriculums to fit the technological revolution, especially in the field of BD analytics. Practitioners within energy industries must also refine their skills and knowledge to meet the challenges of BD in the foreseeable future. The results provide important implications for policy setters to revise current financial accounting standards to cope with technological innovation.Originality/valueThe study makes a valuable contribution by critically examining the impact of BD on various financial accounting practices neglected in prior research. It highlights the transformative power of BD in the domain of financial accounting and provides insights into its potential implications for energy firms.

A COMMENT ON THE US STUDENT LOAN SITUATION FROM A POST-KEYNESIAN PERSPECTIVE

This paper aims to contribute to the debate on the US student debt situation. First, it highlights the determination of labor earnings and economic activity as a function of macroeconomic conditions and the relevance of considering this endogeneity to analyzing student debt sustainability. Next, I present a background on student loans and the labor market in the US. Moreover, using a Minskyian framework, I argue that the current student debt situation can have adverse results on economic activity, although not leading to financial instability. Last, I comment on the student debt cancellation debate, proposing alternative policies with more progressive and lasting effects.

DS-HECK: double-lasso estimation of Heckman selection model

We extend the Heckman (1979) sample selection model by allowing for a large number of controls that are selected using lasso under a sparsity scenario. The standard lasso estimation is known to under-select causing an omitted variable bias in addition to the sample selection bias. We outline the required adjustments needed to restore consistency of lasso-based estimation and inference for vector-valued parameters of interest in such models. The adjustments include double lasso for both the selection equation and main equation and a correction of the variance matrix. We also connect the estimator with results on redundancy of moment conditions. We demonstrate the effect of the adjustments using simulations and we investigate the determinants of female labor market participation and earnings in the US using the new approach. The paper comes with dsheckman, a dedicated Stata command for estimating double-selection Heckman models.

Measuring the effect of self-reported sexual orientation on earnings: evidence from the general social survey

This study uses General Social Survey (GSS) data to explore the difference in earnings between gay, lesbian, bisexual, and heterosexual individuals. The most recent GSS surveys have data on self-identified sexual orientation, providing an opportunity to explore its role as a determinant of earnings with more accuracy than previous estimations in the literature relying on sexual history or cohabitation status to determine sexual orientation. Results show no significant difference between gay or bisexual men and straight men. For bisexual women, the results show a penalty of 20.8% in relation to heterosexual women which is not explained by human capital, demographics, or job characteristics. For lesbian women, the results show no significant earning difference in comparison to heterosexual women. These findings provide evidence that potential issues of misclassification resulting from using proxies to determine sexual orientation deserve careful consideration.

The Market for Economics and Finance PhDs

AbstractThis paper presents new information about the post‐graduation activities of those with a PhD in economics and finance from an Australian university. Approximately 40 per cent have an academic job, while the other 60 per cent work elsewhere or engage in other activities. The analysis includes origin‒destination networks for both the academic and non‐academic markets, the determinants of earnings and measures of overqualification and underemployment. The findings of the paper can provide guidance for those completing or contemplating PhD studies.

Determinants of Earnings of Rural Households of Multan District (Pakistan)

This study focuses on exploring the factors affecting on urban Earnings of household of Multan district. Cross-sectional data was collected through questionnaire from household of District Multan's belonging to rural areas. About 300 respondents belonging to rural areas were randomly engaged for an interview in 2021. Mincerian earning function was used for analysis and its extension form was also analyzed. In this study it was found that Experience and Education positively impact on earning whereas experience square had a negative impact while evaluating Mincerian Earing function. In the Extended Mincerian Earing function, Education, experience, age, spouse involvement, marital status, and migration positively impact on earnings while age squared, experience squared, and employment have a negative impact on earnings of rural household of Multan district.

How Much Should We Trust Estimates of Firm Effects and Worker Sorting?

Many studies use matched employer-employee data to estimate a statistical model of earnings determination with worker and firm fixed effects. Estimates based on this model have produced influential yet controversial conclusions. The objective of this paper is to assess the sensitivity of these conclusions to the biases that arise because of limited mobility of workers across firms. We use employer-employee data from the United States and several European countries while taking advantage of both fixed effects and random effects methods for bias correction. We find that limited mobility bias is severe and that bias correction is important.

RELEVANSI NILAI INFORMASI AKUNTANSI (BOOK VALUE DAN EPS) DAN UKURAN PERUSAHAAN BERDASARKAN NILAI KAPITALISASI PASAR

The purpose of this study is to examine the value relevance of accounting information (Book value and Earning Pershare) and firm size. The size of the company in this study is divided into large companies and small companies based on the market capitalization value. This research was conducted using the model portfolio-returns approach and regression approach. To test the value relevance of accounting information will be translated using a regression approach to stock prices, while to measure the value relevance of earnings per share and book value, the adjusted coefficient of determination (adj R2) is used to the company's stock price. Based on the results of this study, it shows that Book value and Earning Pershare have an influence on the company's stock price. Meanwhile, based on the adjusted coefficient of determination (adj R2) of earnings per share and book value, it shows a strong relationship to the company's stock price. The results of other studies based on company size show that book value and earning percentage in large-scale companies have an effect on the company's stock price. Based on the adjusted coefficient of determination (adj R2) value of Earning Pershare and book value, small-scale companies show a weak relationship strength, and large-scale companies show moderate strength of the relationship.

Self-employment as an Alternative to Labor Market Bifurcation: The Role of Human and Ethnic Social Capital

The article examines the role of self-employment in a post-industrial labor market bifurcated between high paying-jobs in the profession and low-paying jobs in the services and construction. In the context, self-employment emerges as an alternative to pour wages and unemployment among both native and immigrant workers. The analysis shows that self-employment is not homogenous between “survival” enterprises yielding minimal income and incorporated firms whose owners earn incomes significantly above their wage-earning counterparts. We examine these differences among whites, blacks, native born and major immigrant nationalities. We examine determinants of earnings and self-employment and find that both are significantly influenced by human capital factors but that, controlling for them, significant differences exist among ethnic groups. These are attributed to differences in social capital linked to ethnic networks. The paper illustrates these differences with examples from the immigrant economic literature and discusses the implications for individual and collective economic achievement.

Estimating returns to education: The control function approach

This study aims to evaluate the effect of schooling years on wage level in Turkey by using the Mincer wage equation. This function is used as the baseline for the investigation of earnings determinants. For this purpose, the relationship between wage and education level of people is estimated by using a semiparametric regression model considering the control function approach. Various variables such as education level, experience, gender and marital status are estimated separately in the wage model by utilizing the Household Budget Statistics micro data set of 2017 in Turkey obtained by the Turkish Statistical Institute. The parametric model does not clarify the model clearly when functional form of relation is not known. To overcome this drawback, semiparametric regression model, which contains parametric and nonparametric variables, can be successfully applied. This model is extended by adding the 1997 education reform as a control variable. The achieved semiparametric test results from this study showed that there is a positive relationship between schooling years and wage level. On the other hand, control function approach results indicate the existence of fluctuant progress for the effect of schooling years on the wage level along the period.

Earnings dynamics and intergenerational transmission of skill

This paper develops and estimates a two-factor model of intergenerational skill transmission when earnings inequality reflects differences in individual skills and other non-skill shocks. We consider heterogeneity in both initial skills and skill growth rates, allowing variation in skill growth to change over the lifecycle. Using administrative tax data on two linked generations of Canadians covering 37 years, we exploit covariances in log earnings (at different ages) both across and within generations to identify and estimate the intergenerational correlation structure for initial skills and skill growth rates, lifecycle skill growth profiles, and the dynamics of non-skill earnings shocks.We estimate low intergenerational elasticities (IGEs) for earnings in Canada; however, skill IGEs are typically 2–3 times larger due to considerable (and persistent) variation in earnings conditional on skills. Both earnings and skill IGEs decline for more recent child cohorts and are lower for children born to younger fathers. Intergenerational transmission of both initial skills and skill growth rates explains up to 40% of children’s skill variation. Skills become a more important determinant of earnings over the first part of workers’ careers; however, intergenerational transmission of skills becomes less important as children age, because skill growth rates are not well-predicted by parental skills. Parents’ initial skills and skill growth rates are equally important determinants of children’s skills, largely because both strongly influence children’s initial skills.Finally, we study intergenerational mobility for the 35 largest cities in Canada, documenting the extent to which considerable differences in earnings and skill IGEs vary with the extent of local heterogeneity in parental skills vs. earnings instability.

Nature and Composition of Earnings Reported by Health Economists and Related Professionals: Gender, Education, and job Characteristics Matter.

BackgroundDespite the fast growth of the workforce comprising health economics (HE), outcomes research (OR), and market access (MA) professionals, little is known about their earnings determination. Only three studies have examined their earnings and none has considered the number of hours worked, traditionally a critical component of income determination models.Objectives(i) Estimate an indicator of annual earnings of HE/OR/MA professionals, comparing male versus female and U.S. versus non-U.S. earnings levels, and (ii) assess the magnitude of the effect of selected human-capital and job-related covariates on their annual earnings determination.MethodsThe study used 2019 self-reported survey data from a sample of 304 HE/OR/MA professionals registered in the HealthEconomics.com global subscriber list. A two-way classification model with multiple replications was used to identify and test earnings variations of HE/OR/MA professionals across genders and locations. An earnings determination function using ordinary least squares was used to identify disparities in response to covariates including average workweek, human-capital stock, and job-related variables by gender and location.ResultsSubstantial earning disparities were observed between HE/OR/MA professionals living in the U.S. and those living in other countries. Non-U.S. respondents exhibited earnings gaps of 44.7% in wages/salaries and 46.8% in total earnings relative to their U.S. counterparts with greater gaps for women than men. The female earnings gap outside the U.S. was considerably greater than in the U.S. Holding a graduate degree; working in a pharmaceutical or biotechnology firm; age, a proxy for experience; and working remotely impacted earnings differentials across different subgroups.ConclusionsThe findings of this paper shed light into the nature and composition of earnings of HE/OR/MA professionals across genders and locations. Exploring the dynamics of earning disparities by gender and location has increased in relevance given the rapidly-changing and uncertain job market environment driven by the COVID-19 pandemic.

Timing of Revenues and Expenses: Evidence from Finland

In accounting, a critical issue is the timing of revenues and expenses in the annual closing of accounts. If expenditures are expired as expenses faster than revenues are generated, the expense method is accelerated. In the opposite case, the expense method is decelerated. Thus, the timing (time lags) of expenses and revenues is an important determinant of earnings and profitability. The objective of this study is to analyze critically alternative methods to estimate the time lags of revenues and expenses. Six different methods based on correlation, return on investment, logarithmic differences, unrestricted OLS, restricted OLS, and Solver optimization are analyzed. Empirically, these methods are applied to nine-year time series of financial statements from a sample of 697 Finnish firms. Empirical analyses show that these methods still have deficiencies that potentially lead to unreliable results of timing. In future, more research on this important topic is called for.

Sociability and Wage Earnings of Rural Migrant Workers

In recent years, the total number of rural migrant workers has been growing. By the end of 2019, this number has reached 290.8 million. However, there is a big gap between rural migrant workers and urban workers in terms of employment, income, public services and social security until now, especially wage earnings, which has received much attention. Many studies fully explore the determinants of the wage earnings of rural migrant workers from the perspectives of education, vocational training, household registration policy, city size, social capital and social networks, while few studies focus on the impact of sociability.Based on the data from the Chinese Family Panel Studies（CFPS）in 2010 and 2014, this paper constructs an indicator to evaluate the sociability of workers from the two sub-dimensions of language expression and interpersonal relationship, and explores the effect of sociability on the wage earnings of rural migrant workers. Then, it uses the regression of one-period lagged variable and the instrumental variable method to deal with the possible endogeneity. After that, the results are still robust.The results indicate that: （1）Sociability has a significant positive effect on the wage earnings of rural migrant workers, and obviously there are gender and intergenerational differences in the impact of two sub-indicators.（2）There is a significant “migration effect” that the impact of sociability on wages would be weaker while the migration distance is increasing.（3）With the increase of wage earnings quantile, the impact of sociability becomes more significant.（4）In terms of mechanism, sociability mainly affects the wage earnings of rural migrant workers through four channels: social capital effect, career development effect, labor contract effect and information advantage effect. It is recommended that the relevant policies on the development of rural human capital should not only focus on the traditional human capital, such as education and training, but also strengthen the cultivation of sociability and other non-cognitive abilities, especially rural children.The marginal contributions of this research are that: （1）The perspective is more focused. This paper only investigates the impact of sociability（not non-cognitive abilities）, while focusing on rural migrant workers.（2）Considering the characteristics of migration, this paper examines the “migration effect” of sociability returns.（3）In terms of mechanism, this paper puts forward the labor contract effect and the information advantage effect, which supplements the related research.

Earnings management and audit quality at Damascus securities exchange: does managerial ownership matter?

PurposeThe purpose of this study is to examine the individual and combined effect of managerial ownership and external audit quality, as two control mechanisms, on earnings management.Design/methodology/approachThis study applies ordinary least squares estimates on fixed-time effects panel regression model to test the impact of the investigated variables on earnings management for the whole population of banks and insurance companies listed at Damascus Securities Exchange (DSE) during the period from 2011 to 2018.FindingsThe empirical evidence suggests a negative non-linear relationship between managerial ownership (as proxied by board of directors’ ownership) on earnings management. However, neither audit quality nor the simultaneous effect of the managerial ownership and audit quality (Big 4) affects earnings management.Research limitations/implicationsDSE is dominated by the financial sector and the number of observations is constrained by the recent establishment of DSE and the small number of firms listed at DSE. In addition, the non-availability of data on executive directors’ and foreign ownerships restrict our ability to uncover the impact of different dimensions of ownership structure on earnings management.Practical implicationsFirst, it stimulates investors to purchase stocks in financial firms that enjoy both high managerial ownership, as they seem enjoying higher earnings quality. Second, the findings encourage external auditors to consider the ownership structure when choosing their clients as the financial statements’ quality is affected by this structure. Third, researchers may need to consider the role of managerial ownership when analyzing the determinants of earnings management.Originality/valueIt fills the gap in the literature, as it investigates the impact of both managerial ownership and audit quality on earnings management in a special conflict context and in an unexplored emerging market of DSE. It suggests that managerial ownership exerts a significant role in controlling earnings management practices when loose regulatory environment combines conflict conditions. However, external audit quality fails to counter earnings management practices when conditions are fierce.

Determinants of Earnings and Gender Earnings Gaps among Highly Educated Workers within Major Cities in Asian Countries*

The present paper analyzes determinants of earnings and the gender earnings gap among highly educated younger workers from nine major cities in Asian countries. We identify skill premiums for both men and women in each city, such as holding a postgraduate degree or degrees in specific fields and experience working or studying abroad. These results show that competition for earnings among highly educated younger workers has been increasing in these cities. Furthermore, the results reveal that, despite being quite narrow, significant gender gaps do exist; the means of log female earnings in each city range between 95.6 and 97.9 percent of those of men. Individuals having natural science degrees or managerial positions possibly affects these small gender gaps in some cities.