The effect of retaliation costs on employee whistleblowing

Jonas Heese and Gerardo Pérez-Cavazos

Journal of Accounting and Economics, 2021, vol. 71, issue 2

Abstract: We use large increases in unemployment insurance (UI) benefits to study the effects of expected retaliation costs on employee whistleblowing. Increases in UI benefits reduce the costs that arise from a job loss, one of the costliest forms of retaliation. We find that increases in UI benefits increase the number of facility-level employee workplace safety complaints filed with the regulator. Furthermore, UI benefit increases also result in more violations and more penalties. The effects are concentrated in firms where retaliation is more likely as measured by weaker employee relations, internal controls, and monitoring. Our findings show the importance of reducing retaliation costs to tap into employees’ knowledge of misconduct.

Keywords: Employee whistleblowing; Retaliation costs; Labor unemployment insurance; Workplace safety inspections (search for similar items in EconPapers)
JEL-codes: M40 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:71:y:2021:i:2:s0165410120300872

DOI: 10.1016/j.jacceco.2020.101385

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