We use state-level increases in unemployment insurance (UI) benefits as exogenous shocks to unemployment risk to examine its effect on accounting conservatism. Employing difference-in-differences analyses, we find an increase in accounting conservatism after UI benefit increases. Our findings support the employee perception management hypothesis, which argues that in order to mitigate labor costs associated with worker turnover, firms have incentives to manage employees’ perceived job security through less conservative accounting. When UI laws reduce workers’ separation costs, employer firms have less incentives to manage employees’ perception, attributing to the positive relation between UI benefits and accounting conservatism. Subsample tests show that this effect is driven by labor-intensive firms as well as firms with higher risk. Overall, our paper suggests that labor market frictions have a significant impact on firm's accounting reporting policies.

中文翻译：

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劳动失业保险与会计保守主义

我们使用州级失业保险 (UI) 福利的增加作为失业风险的外生冲击来检验其对会计稳健性的影响。采用差异中的差异分析，我们发现在 UI 福利增加后会计稳健性增加。我们的研究结果支持员工感知管理假设，该假设认为，为了降低与员工流动相关的劳动力成本，公司有动机通过不太保守的会计来管理员工感知的工作保障。当 UI 法律降低工人的离职成本时，雇主公司对管理员工看法的动机较少，这归因于 UI 福利与会计保守主义之间的正相关关系。子样本检验表明，这种影响是由劳动密集型企业以及风险较高的企业驱动的。全面的，