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



The paper examines the effect of international regulatory harmonisation on cross-border labour migration. We analyse directives in the European Union (EU) that harmonised accounting and auditing standards. This regulatory harmonisation should make it less costly for those who work in the accounting profession to move across countries. Our main research design compares the cross-border migration of accounting professionals relative to tightly matched other professionals before and after regulatory harmonisation. We find that, on average, labour migration in the accounting profession increases relative to the legal profession as well as other comparable professions by roughly 20% to 40% after harmonisation. The effects are larger among young people who are likely to be more responsive to a reduction in mobility barriers. They are also stronger among employees of large companies, which are subject to higher degrees of harmonisation. The findings illustrate that diversity in rules constitutes an important economic barrier to cross-border labour mobility and, more specifically, that accounting harmonisation can have meaningful effect on cross-border migration.

This seminar is organised by the Erasmus Accounting Research Group.