The Effect of Regulatory Harmonization on Cross-border Labor Migration:Evidence from the Accounting Profession

The Effect of Regulatory Harmonization on Cross-border Labor Migration:Evidence from the Accounting Profession

Matthew Bloomfield, Ulf Brüggemann, Hans Christensen, Christian Leuz

Series number :

Serial Number: 
303/2016

Date posted :

December 01 2015

Last revised :

January 22 2016
SSRN Share

Keywords

  • Accounting harmonization • 
  • regulation • 
  • IFRS • 
  • European Union • 
  • Labor migrationand mobility

The paper examines whether international regulatory harmonization increases cross-border labor migration. To study this question, we analyze European Union (EU) initiatives that harmonized accounting and auditing standards. Regulatory harmonization should reduce economic mobility barriers, essentially making it easier for accounting professionals to move across countries.

Our research design compares the cross-border migration of accounting professionals relative to tightly-matched other professionals before and after regulatory harmonization. We find that international labor migration in the accounting profession increases significantly relative to other professions. We provide evidence that this effect is due to harmonization, rather than increases in the demand for accounting services during the implementation of the rule changes. The findings illustrate that diversity in rules constitutes an economic barrier to cross-border labor mobility and, more specifically, that accounting harmonization can have a meaningful effect on cross-border migration.

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Authors

Real name: 
Matthew Bloomfield
Real name: 
Ulf Brüggemann
Real name: 
Hans Christensen
Professor
Real name: 
Christian Leuz
Fellow, Research Member
The University of Chicago - Booth School of Business