I explore the role that accounting rules, in particular the restrictiveness of GAAP, have played in the declining supply of accountants. I find that when exposure to restrictiveness is high, there are fewer students majoring in accounting, fewer CPA exam candidates, and fewer accountants and auditors overall. The overall demand for accountants does not decrease when exposure to restrictiveness is higher – however, the nature of the demand for accountants changes. There is less focus on tasks such as applying judgment, thinking creatively, and thinking critically, and more focus on determining compliance. Despite the decrease in the number of accountants, earnings for accountants do not increase, and the wage distribution becomes more compressed. I supplement these analyses with a survey-based field experiment. Consistent with the archival results, the salience of restrictiveness deters students from entering the profession due to their inability to use creative and critical thinking. Overall, the findings suggest that restrictive regulation can shift the task content of occupations and reduce the pool of individuals interested in the profession.

Audits by private, third-party auditors are frequently mandated to ensure compliance with regulations (e.g., accounting or environmental standards).  We examine how such mandates shape the market for audits.  In our empirical examination, we focus on one of the oldest and most prominent audit markets, the market for audits of firms' financial accounting.  Using novel data on firms, audit firms, and auditors---the key players in the market---, we find that audit mandates increase the number of audits, audit firms, and auditors, but decrease average auditor wages.  These findings are consistent with mandates creating demand for low-quality audits, originating from involuntarily audited firms, in a market with differentiated audit qualities.  In line with this interpretation, we find that the regulatory audit demand emanates from smaller firms with limited incentives to obtain audits voluntarily; and is served by new, smaller audit firms and younger, inexperienced auditors.  Collectively, our findings suggest that the promise of audit mandates as a means to ensure regulatory compliance may be limited due to the emergence of low-quality audits.

We analyze the dynamic of quantitative human capital disclosures by U.S. public firms using a large sample of hand-collected data from 12,356 10-K filings over the 2018–2023 period. We find that firms are more likely to disclose human capital metrics in their 10-K filings after the SEC's 2020 amendment to Regulation S-K that required firms to provide additional human capital information. However, considerable heterogeneity remains in terms of the firms that disclosed and what they disclosed. We find that quantitative disclosures are not comparable within industries. This selective disclosure equilibrium seems to be driven by various economic factors, information collection frictions, uncertainty about what should be disclosed, and firms’ underlying performance on these metrics. We provide both empirical and qualitative evidence to explain these drivers.

Labor unions in the United States are subject to financial reporting mandates. This paper studies how these mandates affect unions and their members. Using multiple regulation-based empirical designs, we document that these mandates adversely affect unions’ election outcomes. Additional analyses suggest that the negative effects stem from the strategic use of unions’ disclosed information by employers’ hired consultants rather than from improved oversight. Consistent with the mandate’s negative effects on unions, we find that unions spend substantial resources to lobby against more stringent reporting requirements. Lastly, we find that the mandate reduces the average pay of employees, unions’ ultimate stakeholders. Collectively, our results suggest that disclosure mandates impose costs on unions and hurt their ability to represent employees, resulting in worse employment outcomes.

We leverage the release of standardized Equal Employment Opportunity (EEO-1) reports for over 800 federal contractors to provide empirical evidence on public firms' diversity practices. Using our unique data for 2016-2020, we first document that public firms exhibit a significant lack of diversity, especially among first and middle managerial ranks. Second, we find robust evidence that underperformance in workforce diversity is associated with the decision to withhold the public release of firms' EEO-1 forms. Overall, our results suggest that market forces are unable to achieve unraveling, and a disclosure mandate may be necessary for investors to observe the DEI practices of all firms, rather than just the more virtuous ones.

Recent proposals for a more inclusive capitalism call for labor and minority representation in corporate governance.  We examine the joint promise of labor and minority representation in the context of German works councils.  The councils are a powerful form of labor representation which grants elected delegates of shop-floor workers co-determination rights (e.g., over work conditions).  Since 2001, a quota ensures that elected delegates include delegates of the gender that is in the minority in the workforce.  Using detailed survey and administrative data, we find that required minority representation appears to help the representation of the minority gender on works councils, elevate the effort of works councils, and boost job satisfaction and well-being of workers, irrespective of their gender. At the establishment level, we find that required minority representation appears to reduce worker turnover and increase investment and productivity.  Our findings are consistent with diverse teams working harder and delivering better outcomes.  These benefits plausibly reflect that diverse teams shirk less as a result of costlier collusion and/or better selection.  Either way, the fact that a quota is necessary to unleash these benefits suggests that biases hurt the representation of minorities in positions of power and the well-being of all workers.