Why Do People Self-Select into Public Accounting? The Role of Socioeconomic Status, Resource Scarcity, and Evolutionary Psychology

• In Event: Individual-Level Traits and Their Effects

Abstract

Little is known about the decision to self-select into public accounting, despite the central importance of this decision to scholars and practitioners. We draw on life history theory from evolutionary biology—which explains how people allocate resources throughout their lives to achieve fundamental goals—to identify two likely predictors of self-selection: a person’s socioeconomic status (SES) while growing up and the intensity of resource scarcity in the person’s environment at the time of the decision. We use multiple methods to test the effects of these variables on self-selection. Study 1 is an archival study using data from a survey of millions of incoming college freshman between 1979 and 2002. As predicted, we find a significantly negative association between SES and self-selection into accounting that is robust over time. We also find that, as expected, people from low SES self-select into accounting at lower rates during recessions, which is our proxy for resource scarcity. Study 2 is an experiment in which we manipulate a prime of resource scarcity to demonstrate its causal effect. We find that resource scarcity decreases self-selection into accounting when SES is lower and increases self-selection into accounting when SES is higher. Supplemental analyses provide additional support for our life history theory explanation. We discuss implications for the accounting labor market and for the public accounting profession.

Authors

• Justin Leiby, University of Florida

• Paul E. Madsen, University of Florida