When Paychecks Talk: New Research by Alex Nekrasov
How earnings announcements influence employee spending, confidence, and workplace morale
When Paychecks Talk: New Research by Alex Nekrasov
Alex Nekrasov, associate professor of Accounting, has recently published his paper, “Do Earnings Announcements Affect Employee Spending? Evidence from Transaction Data,” in the Journal of Accounting Research. In the study, Nekrasov and his co-authors find that earnings announcements don’t just move markets— they also influence how employees view their financial security. Employees change their spending in response to earnings news from their employers, especially when it provides a clearer signal about their future wages.
Analyzing bank and credit card data from nearly 700,000 employees across 691 firms, the researchers find that workers quickly change their spending in response to earnings news—especially in the week immediately following an announcement. Reactions are strongest among long-tenured employees, those based at company headquarters, and those with investment experience—groups most likely to track financial disclosures.
The effect is particularly pronounced for year-end announcements and when earnings results receive broad media coverage, underscoring how financial news reaches beyond investors to shape everyday financial decisions. Importantly, the study also finds that earnings announcements can predict changes in wages in the months that follow, highlighting their influence on both household budgets and career expectations.
Takeaways for Business Practitioners
Earnings communications influence internal morale and financial behavior within their organizations. Employees interpret good (or bad) earnings as signals about their own stability and prospects. Messaging around earnings announcements—especially year-end—should balance transparency with reassurance to avoid unintended anxiety or overspending. Firms that manage financial communication well can foster confidence, stability, and engagement among their workforce.