Lower Earnings Research Articles

The joint effect of earnings management and efficiency of cash management on firms’ financial well-being: evidence from Egypt

Purpose This study aims to investigate the association between earnings management and the efficiency of cash management as well as the extent to which this relationship affects a firm’s financial well-being (FWB). Design/methodology/approach Using fixed-effects models and quarterly financial statements of 178 nonfinancial firms, this study analyzes 3,376 firm-quarter observations listed on the Egyptian stock market from 2005 to 2019. Findings The empirical findings suggest that optimal cash holdings and cash holding excess increase with lower real earnings management (REM) of operating activities or higher accrual earnings management (AEM). This relationship positively impacts firms’ FWB but is negatively influenced by REM. Research limitations/implications This study’s findings have two key implications for standards regulators and decision-makers. First, the study reveals the link between opportunistic earnings management and cash management, emphasizing the need for stricter oversight in corporate governance to prevent risky long-term decisions. Furthermore, these findings suggest that regulators, specifically in emerging markets, should proactively develop policies to limit earnings management. Second, this study demonstrates how accounting discretion affects both earnings management and short-term working capital management, underscoring the potential erosion of stakeholders’ confidence when financial statements are misleading. Originality/value This study examines the impact of sales manipulation and overproduction on cash holdings. To the best of the author’s knowledge, this is also the first study to explore how managerial discretion over both earnings and excess cash holdings influences a firm’s FWB. This study provides new empirical evidence of the joint effects of managerial opportunism in earnings and cash management on a firm’s financial health.

Pengaruh Jumlah Penduduk, Pengangguran, dan Pendidikan terhadap Kemiskinan di Wilayah Eks Karesidenan Banyumas

Poverty is a condition characterized by insufficiency to satisfy everyday needs in situations not involving the will. Poverty can degrade the quality of human resources, resulting in lower levels of productivity and lower earnings. The aim of this study is to find out the influence of factors such as population, unemployment, and education on poverty in the Banyumas Ex-Resident Territory from 2013 to 2022. This is quantitative research, processing data using E-Views 10 software in the regression of panel data. The data used is secondary data from the Central Statistical Agency source. Fixed+Effect+Model became a suitable model in this study. According to the research, the population, unemployment, and education variables have a combined or simultaneous impact on the poverty variable.

Adult Work Ability Following Diagnosis of Bacterial Meningitis in Childhood

ImportanceA diagnosis of bacterial meningitis in childhood can lead to permanent neurological disabilities. Few studies have examined long-term consequences for work ability in adulthood.ObjectiveTo compare earnings, work loss, and educational attainment between adults diagnosed with bacterial meningitis in childhood and population comparators.Design, Setting, and ParticipantsThis nationwide registry-based matched cohort study included individuals in Sweden diagnosed with bacterial meningitis in childhood (aged <18 years) from January 1, 1987, to December 31, 2019, and general population comparators matched 1:9 on age, sex, and place of residence. Follow-up was completed December 31, 2020. Data were analyzed from February 7 to September 12, 2023.ExposureA diagnosis of bacterial meningitis in childhood recorded in the National Patient Register.Main Outcomes and MeasuresAnnual taxable earnings (in 2020 US dollars), work loss (sum of sick leave and disability insurance), and educational attainment.ResultsThe cohort included 2534 individuals diagnosed with bacterial meningitis in childhood (mean [SD] age at diagnosis, 4.7 [5.3] years) and 22 806 comparators (13 510 [53.3%] male). Among those with childhood bacterial meningitis, 812 (32.0%) were diagnosed at younger than 1 year and 1351 (53.3%) were male. From 18 to 34 years of age, those with childhood meningitis had lower adjusted earnings relative to comparators and higher adjusted work loss. When pooling observations for individuals 28 years or older, the annual mean reduction in earnings was −$1295 (95% CI, −$2587 to −$4), representing a 4.0% (95% CI, 0%-8.0%) reduction relative to comparators, and the annual increase in work loss was 13.5 (95% CI, 8.6-18.5) days. There was a larger reduction in earnings for those with childhood meningitis relative to comparators with pneumococcal (Streptococcus pneumoniae) vs meningococcal (Neisseria meningitidis) meningitis. For work loss, there was a difference among all 3 major causes of meningitis, with the largest increase for pneumococcal meningitis. Individuals diagnosed at a younger age (below the median) had lower earnings relative to comparators and higher work loss than individuals diagnosed at an older age (above the median). Fewer individuals with childhood meningitis relative to comparators had obtained a high school degree at age 30 years (adjusted odds ratio, 0.68 [95% CI, 0.56-0.81]).Conclusions and RelevanceIn this cohort study of adults diagnosed with bacterial meningitis in childhood, findings suggest that work ability decreases relative to population comparators, with lower earnings and higher work loss, especially among adults diagnosed with pneumococcal meningitis or diagnosed at a young age, with long-lasting costs for the individual patient and society at large.

Balancing work and earnings: The long-term impact on mental health

Earnings and work hours (e.g., weekly work hours) are key determinants of one's mental health. While higher earnings are linked to better mental health due to reduced financial stress, they may come at the cost of longer work hours harmful for mental health. Therefore, balancing work hours with earnings is crucial for mental health. Using the 2015, 2017, and 2019 waves of the Panel Study of Income Dynamics (N = 6,776), this study explores how one's earnings and work hours combine to influence mental health using growth mixture modeling and a negative binomial regression model, with generalized propensity score weighting for causal inference. The findings reveal that working 40 h a week with earnings two to three times the US federal poverty threshold benefits mental health. However, earning more by working 60 h a week does not provide additional mental health benefits. Additionally, individuals with a history of low earnings face a high risk of psychological distress, even as their earnings improve over time. This risk is similar to that experienced by those consistently earning low incomes. Our findings highlight the importance of clarifying work-earning balance for one's mental health as well as identifying people with mental health needs from a longitudinal perspective.

Mental disorder symptoms and diagnoses are differently associated with labour market attachment and registered income until midlife: The Northern Finland Birth Cohort 1966.

Both the symptoms and diagnoses of mental health disorders affect individuals' occupational status and income. However, studies that compare the impact of differences between symptoms and diagnoses on occupational outcomes are lacking. This study aimed to compare labour market attachment and income until midlife between individuals with different histories of mental disorder symptoms and diagnoses. Utilizing the Northern Finland Birth Cohort 1966 with linkages to national registers and self-reported mental disorder symptoms at the age of 31, we compared labour market attachment and income until midlife among individuals with neither mental disorder symptoms nor a diagnosis (reference group), symptomatic undiagnosed mental disorder, asymptomatic diagnosed mental disorder, and with symptomatic diagnosed mental disorder by using cross-tabulations and regression analyses. We stratified our analysis by sex. Compared to the reference group, males but not females with symptomatic undiagnosed mental disorder had an increased risk for poor labour market attachment, with Odds Ratios (95% Confidence intervals) 2.26 [1.41, 3.63] and 0.87 [0.63, 1.19], respectively. The analogous risk was heightened for both males and females with asymptomatic diagnosed mental disorders or symptomatic diagnosed mental disorders. Regarding income, having mental disorder symptoms, a diagnosis, or both was associated with lower earnings irrespective of sex. Mental disorder symptoms and diagnoses are differently associated with labour market attachment and income. Our findings suggest that interventions should be offered not only based on diagnoses but also based on symptoms as they may serve as predictors of future challenges related to work careers.

Should Men Pay Bills? -- Financial Disparities in Heterosexual Relationships

Abstract: This study investigates the enduring norm and rising debatable question of whether men should bear the financial burden in heterosexual relationships Should men pay bills? analyzing the gender dynamics through the lens of financial disparities. Drawing on a survey of 231 participants across diverse demographics, primarily from China, this study explores how societal norms and economic inequities influence heterosexual relationships and contribute to traditional gender norms. By dissecting factors such as the gender wage gap, the pink tax, and the division of labor in non-reproductive tasks, this paper highlights the economic and cultural forces impacting traditional gender roles. The survey reveals that men are generally perceived and often function as the primary earners, influenced by stereotypical gendered norms and expectations, resulting in women encountering economic disadvantages due to lower earnings and greater financial commitment to personal care. This study also examines societal pressures that dictate spending patterns, especially among women, on aesthetics, which contribute significantly to their financial and emotional strain. The findings suggest a critical need to reassess the traditional financial roles in relationships and push toward more equitable financial practices. The findings prompt a reconsideration of gendered financial responsibilities and advocate for a shift towards more equitable practices.

ПРАВОВИЙ НІГІЛІЗМ У ПРОЦЕСАХ ЇХ СОЦІАЛІЗАЦІЇ В УКРАЇНІ У 1920-ті рр.

The article reveals the issues of adolescents’ legal nihilism and socialization in Ukraine during the 1920s. The reasons for the formation of adolescents’ legal nihilism during the period under study are described. They are political changes in the country, changes in the traditional system of social organization, introduction of anti-religious policy, economic crisis caused by war, revolution and famine, unemployment, low earnings of the population and violations of labour protection conditions, including among teenagers, a class approach to education, increasing crime, homelessness and other socio-economic problems. The main driving mechanisms of the formation of the younger generation’s legal values are determined in terms of the role of the Bolshevik government and non-conformist organizations in Ukraine during the 1920s. The main fundamental nihilistic conflicts and contradictions among adolescents are determined. The types of children’s institutions that fought against child homelessness and nihilism are revealed. They are orphanages, schools-communes, institutions for defective children, shelters, children’s distribution centres, institutions of forced education, children’s legal consultations, commissions for juvenile affairs, children’s inspections, etc. The specific features of the prevention of legal nihilism on the way to adolescents’ socialization during the studied period are characterized. They are: the development of school education; establishment of a network of children’s institutions; creation of youth and adolescent culture in antisocial groups (groups of deviant teenagers) and prosocial groups (school, pioneer and Komsomol organizations). The significance of A. S. Makarenko’s ideas regarding the fight against child homelessness and delinquency is revealed. These ideas include adolescents’ education at labour faculties, labour education, aesthetic education, the formation of mutual responsibility and trust between adolescents, their return to a quality life, etc.). Key words: adolescents, legal nihilism, prevention, socialization, children’s institutions.

Financial Regulators on Boards: Evidence From Earnings Information Quality

ABSTRACTWe find that directors with a financial regulatory background are associated with lower earnings quality. The influence of financial regulatory directors (FRDs) is more substantial for firms with higher proprietary costs and FRDs with greater expertise and experience. FRD firms do not have a greater likelihood of financial misconduct or meeting or beating analysts' forecasts. The stock market reacts more positively to FRD appointments than to the appointments of other directors. Our findings suggest that FRDs certify firm discipline, with lower earnings quality reflecting strategic choices rather than opportunistic manipulation, highlighting the impact of postemployment restrictions in financial regulatory agencies.

Labour market participation and income in patients with IBD onset before young adulthood - the role of disease severity and mental health.

Only few studies have examined the socioeconomic consequences of being diagnosed with inflammatory bowel disease (IBD) in childhood or youth. Disease severity has been linked to lower earnings, but little attention has been paid to comorbid mental health conditions. The aim is to examine labour market participation (LMP) and income in patients with IBD-onset in childhood or youth and examine how disease severity and mental health conditions affects LMP. In this register-based cohort study, we included patients with IBD-onset before 25 years of age and matched comparators. We estimated the relative risk (RR) of having low LMP and the median yearly income from ages 26 to 30. RR of low LMP was also assessed in subgroups of patients based on disease severity (severe/non-severe) and mental health conditions (yes/no). A total of 3,398 patients with IBD and 28,207 comparators were included. Overall, patients with IBD more often had low LMP (16.4% vs 14.4% in comparators), but slightly higher income (median yearly income difference at age 30: 1,141 Euro [95% CI: 483-1,798]). In subgroup analyses, only patients with severe IBD had higher risk of low LMP (RR 1.46 [95% CI 1.23-1.72]), not patients with non-severe IBD. Among patients with severe disease and mental health conditions 46% had low LMP (RR 5.03 [95% CI 4.38-5.78]). Patients with IBD more often had low LMP, but their income was not affected. The subgroup of patients with severe disease and mental health conditions had the highest risk of low LMP.

Comparison of nursing home workforce with acute-care setting nursing workforce: Using a national sample survey

Nursing home nurse staffing is aggravated by poor working conditions, low wages, turnover, low nurse staffing ratios, and hours per resident day. Nursing workforce analyses on nursing home settings are limited. This study aimed to understand the national nursing home registered nurse workforce by comparing acute-setting registered nurse workforce characteristics. The study was conducted using cross-sectional secondary analysis. Around 60% of nursing home nurses reported having fewer than 5 years of experience in their primary nursing position compared to 48% of respondents in acute care. Nursing home nurses had a higher rate of licensed practical/vocational nurses and lower annual earnings compared to those in acute care. Total registered nurse hours worked per year, weekly hours scheduled, and weekly hours worked were all higher in nursing home care settings compared to acute-care settings. Enhanced systemic support to improve nursing home environments would help nurses focus on these identified areas.

Co‐CEO Structure and Earnings Smoothing Incentives

AbstractThis paper investigates the effects of a co‐CEO structure on earnings smoothing and its implications for the informativeness of earnings. While the consequences of a co‐CEO structure have been relatively underexplored in prior research, existing studies suggest potential benefits, such as higher valuations and stronger internal governance. This paper delves into the specific consequences of a co‐CEO structure, focusing on earnings smoothing practices. Using data from Korean firms, where co‐CEO structures are prevalent, we find that firms with a co‐CEO structure exhibit smoother earnings compared to those with a sole‐CEO structure. However, the informativeness of these smooth earnings is reduced under a co‐CEO structure, suggesting that co‐CEOs engage in earnings smoothing primarily for their own benefit, rather than to provide more information to investors. Additional analyses reveal that co‐CEOs' earnings smoothing leads to adverse consequences for investors, including lower earnings quality, higher costs of capital, increased financial distress, greater credit risk, and higher stock price crash risk. Our study contributes to the literature by highlighting the potential costs associated with co‐CEO structures, particularly in terms of reduced earnings informativeness.

Do pay secrecy policies prevent voluntary turnover?

AbstractPay secrecy (PS) policies, commonly found in the US private sector, restrict pay communication among employees. Previous research suggests that these policies help prevent pay dissatisfaction and attrition among low earners by limiting salary comparisons. However, by exploiting the staggered adoption of PS bans across US states as a negative shock to PS, I find no causal relationship between PS and voluntary turnover. This suggests that workers' reluctance to ask others about their pay renders PS policies irrelevant for retention purposes. This, in turn, highlights the need for organizations to consider alternative approaches to enhance employee retention and commitment.

Household decisions and the gender gap in job satisfaction

AbstractThis paper offers a novel theoretical explanation for the gender gap in job satisfaction, where women typically report higher job satisfaction than men. We argue that rational family decisions can result in divergent job choices for women and men, leading to increased job satisfaction but lower earnings for women, even when their preferences and expectations align with those of men. We develop this explanation within a theoretical model of family household decision‐making that considers relative earnings disparities within households. We provide empirical evidence supporting our model's predictions utilizing survey and administrative data from Canada.

A Novel Predictive Modeling for Student Attrition Utilizing Machine Learning and Sustainable Big Data Analytics

Student attrition poses significant societal and economic challenges, leading to unemployment, lower earnings, and other adverse outcomes for individuals and communities. To address this, predictive systems leveraging machine learning and big data aim to identify at-risk students early and intervene effectively. This study leverages big data and machine learning to identify key parameters influencing student dropout, develop a predictive model, and enable real-time monitoring and timely interventions by educational authorities. Two preliminary trials refined machine learning models, established evaluation standards, and optimized hyperparameters. These trials facilitated the systematic exploration of model performance and data quality assessment. Achieving close to 100% accuracy in dropout prediction, the study identifies academic performance as the primary influencer, with early-year subjects like Mechanics and Materials, Design of Machine Elements, and Instrumentation and Control having a significant impact. The longitudinal effect of these subjects on attrition underscores the importance of early intervention. Proposed solutions include early engagement and support or restructuring courses to better accommodate novice learners, aiming to reduce attrition rates.

Do US cross-listings, IFRS adoption and domestic investor protection impact earnings management?

PurposeThis paper investigates the impact of International Financial Reporting Standards (IFRS) adoption and domestic investor protection on the relationship between United States (US) cross-listing and earnings management.Design/methodology/approachThe paper applies ordinary least squares (OLS) regression analyses to a matched sample of cross-listed and non-cross-listed firms from 2000 to 2018, covering 38 countries.FindingsWe find that US cross-listed firms have lower real earnings management. The results also show that real earnings management is lower for US cross-listed firms that adopt IFRS and from high domestic investor protection countries. Our results further show that real earnings management is higher when cross-listed firms use Level 1 American Depository Receipts (ADRs) to cross-list but adopting IFRS and high domestic investor protection help reduce real earnings management. Using the SEC’s Rule 12h-6 as a quasi-natural experiment, we document that post-12h-6 Rule, firms in high domestic investor protection countries experience a reduction in both accruals and real earnings management. However, the result is the opposite in countries with low investor protection.Originality/valueOur findings have implications for regulators and policymakers on the impact of ADR levels and Rule 12h-6 on earnings management.

The double disadvantage faced by adolescents from low socioeconomic backgrounds with mental health problems affects earnings up to mid-life

Early childhood socioeconomic disadvantage and mental health problems are both important determinants of adult social and economic experiences, but little is known about how they interact in this respect. We aimed to assess whether poor mental health in adolescence exacerbates labour market inequalities originating from low socioeconomic status (SES) in childhood. We use a birth cohort of individuals born in 1958 in England and follow their employment experiences and cumulative earnings up to age 55. We proxy low SES in childhood with father's occupational class at the time the respondent was aged 11, and use caregiver (usually, parent) ratings of the Rutter inventory at age 16 to identify mental health problems in adolescence. We fit ordinary least squares (OLS) models to estimate the effect of growing up in a low-SES family and experiencing mental health problems (conduct or emotional problems) in adolescence on cumulative earnings (log-transformed). We use an interaction term to test whether the association between mental health problems (conduct and emotional separately) and earnings differed by socioeconomic group. Individuals who experienced conduct problems in adolescence had lower cumulative earnings and employment levels up to age of 55. Moreover, the association between mental health problems and cumulative earnings was higher among individuals who also experienced low SES in childhood. Families from a higher socioeconomic group may have more effective means to counteract the adverse impacts of adolescent mental health problems, likely due to broader access to resources, support systems and opportunities. This underscores the role of structural supports in addressing socioeconomic inequalities in mental health outcomes and their long-terms implications.

Impact of incident rheumatoid arthritis on earnings: a nationwide sibling comparison study.

RA is known to impact work ability but much of this knowledge comes from historical comparisons vs the general population that neither reflects current RA management, nor distinguishes between effects of RA and pre-existing socio-economic conditions of patients. We therefore aimed to examine earnings of patients before and after RA diagnosis, using recent data and sibling comparisons. Swedish register data were used including demographic information and healthcare utilization. Participants were patients with RA (aged 30-60 years, diagnosed with RA 2006-2017) identified in the Swedish National Patient Register, and their same-sex siblings (n = 2433:2433; mean 48 y; 72% women). Earnings data for 2001-2019 were retrieved from Statistics Sweden and analysed from 5 years before to 5 years after RA diagnosis. No differences in average earnings were observed between siblings during the 5 years before diagnosis, but during the 5 years after diagnosis, patients with RA earned on average 5.4% less annually (-1430€[95%CI -2130, -720]) than same-sexed siblings. The change in earnings for the subgroup diagnosed 2006-2010 was -8.2% (-2020€[95%CI -2930, -1120]) but for patients diagnosed 2011-2017 there was no statistically significant change in earnings compared with siblings (-1.5%; -420€[95%CI -1490, 640]). Subgroup analyses demonstrated a more negative impact on earnings for older individuals and those with lower education level. RA diagnosis was associated with lower earnings in comparison with same-sex siblings, particularly for older individuals and those with lower education level. The negative impact of RA on earnings declined or disappeared over the study period.

Communities of Practice: A Strategy for Re-engaging Out-of-School Youth by Nurturing Prospects and Fostering Connections

This research focuses on the potential of the Communities of Practice (CoPs) that might be utilized to bring back the out-of-school youth (OSY) to formal schooling. Even with the attempts to increase enrollment in schools, some of the Filipino youths still have no access to education, and still have difficult life struggles that include loss of jobs and social exclusion. This study discusses the experience and issues with which OSY encounter in CoPs and comprises the valuable prospects for them further. The exploratory research question of the study depicts the experiences of OSY within CoPs in terms of the sense of belonging, social connectedness, and perceived upcoming possibilities. It also narrows down challenges like; they lack financial capital, or have lack of access to services. Subjects of the study were selected within the area of Barangay Nagtenga, Sta. Cruz, Ilocos Sur. Participants and observations were obtained through interviews, and fundamental trends such as isolation, restricted social relationships, and low earnings were identified. From the study, there is a recommended plan on how to bring about the CoPs that focus on the learning from peers, skills enhancement, and community activities for the enhancement of OSY. This research clearly brings out the significance that can be achieved through community-Based strategies in re-engaging and promoting out-of-school youth.

Gender gaps in perceptions of social protection: Insights from the OECD Risks that Matter Survey

AbstractReflecting their weaker labour force attachment and lower earnings, women consistently report feeling greater economic insecurity than men across the Member countries of the Organisation for Economic Co‐operation and Development (OECD). Similar gender gaps emerge in perceptions of social protection systems: women are far less confident than men in their ability to access benefits and services and receive adequate income support when they need it, both in working age and old age. Results from the cross‐national OECD Risks that Matter (RTM) Survey illustrate that, on average, across countries, about half of women feel that they could not easily receive public benefits if they needed them, compared to 43 per cent of men. This perceived inaccessibility likely reflects gender gaps in perceived “hassle costs” associated with social programme applications and the intra‐household allocations of administrative burden, but it also likely reflects women’s lower social security contributions. This article illuminates gender gaps in the design of social programmes and suggests ways by which governments can better mainstream gender when improving the accessibility and adequacy of social protection.

More than Half Underemployed: Developing Talent for Meaningful Work

This article examines the problem of underemployment among recent college graduates and proposes strategies for organizations and institutions of higher education to work individually and collaboratively to address this issue. According to recent data, over 55% of 2020 graduates were underemployed within six months due to factors like economic disruption from the pandemic, skills mismatches, unrealistic graduate expectations, and rising education costs. Long-term impacts of underemployment include lower lifetime earnings and wasted talent. The article suggests organizational approaches like internships, clear communication of needs, bridging roles, and mentorship to develop talent and connect graduates to careers. For institutions, recommendations include experiential learning, career education, industry advisory boards, and robust career services. Finally, the article proposes collaborative models such as curriculum partnerships with employers, employer-embedded teaching, shared talent databases, and joint roundtables to fully tackle graduate underemployment through multi-stakeholder cooperation.