6 perceive it to be exceptionally safe. Accounting provides a relatively secure entry into a business
career for talented individuals from low SES backgrounds, which is encouraging in light of evidence of persistent, implicit discrimination against low SES individuals in other professions
Rivera 2015. Our evidence also suggests that accounting’s distinctive features benefit the
profession by attracting low SES people with attributes desired by the profession. Given the profession
’s and accounting firms’ investments in broadening accounting’s appeal and personalizing recruitment to best compete for talent Jeacle 2008; Carnegie and Napier 2010, it is
inherently important to better understand the vector of attributes that influence a person’s interest in accounting. Childhood SES is among these attributes.
We also contribute to broader theory on career selection and life history theory. We provide the first empirical evidence of which we are aware that people are likely to have different life
history strategies that influence how they view their labor market options. Seminal economic thinkers such as Alchian 1950 and Becker 1976 concurred that insights from evolutionary
biology enrich our understanding of economic choices. As Becker 1976, 818 observes, “the approach of sociobiologists is highly congenial to economists, since they rely on competition, the
allocation of limited resources…efficient adaptation to the environment, and other concepts also used by economists.” Career selection is part of the adaptive landscape of contemporary life, and
is thus well suited to interpretation through a life history theory lens. Our study illuminates the cost benefit tradeoffs that people make when they choose a profession by showing how and why
early life experiences shape the preferences that drive adult career choices.
2. Background Literature and Theory Development
The accounting profession’s sustainability depends on its capacity to attract human capital in an increasingly competitive labor market ACAP 2008; AICPA 2013. It is thus important to
7 better understand why people choose to become accountants. Prior literature provides limited
insight into this choice, mostly from exploratory studies of the personality profiles of accounting students. The evidence suggests that accounting degree programs are dominated by a small subset
of personality types favoring concrete and analytical thinking Oswick and Barber 1998; Wheeler 2001; Swain and Olsen 2012. In a longitudinal study, Swain and Olsen 2012 find that these
personality types disproportionately begin careers in accounting and remain in accounting jobs, suggesting that accounting
“fits” certain personalities. Also, relative to other fields, accounting students are more conscientious and interested in making money, yet less creative and less
enthusiastic about their chosen field Saemann and Crooker 1999; Allen 2004; Madsen 2015. Blay and Fennema 2017 find that some college students exhibit inherent aptitude for accounting,
but this aptitude does not lead to self-selection into accounting. This suggests that self-selection may reflect a more complex set of considerations than
“personality fit” or inherent skills. Indeed, we argue that the choice to become an accountant reflects a complex set of cost-
benefit considerations involving broad social and economic forces.
3
In particular, identifying the forces that drive self-selection promotes
a better understanding not only of the profession’s appeal to labor market entrants, but also of how this appeal may change in different environments and
potentially of the profession’s broader societal function. We focus on the impact of a person’s childhood SES on selection into accounting. SES is
important in itself due to its links to social welfare, as identifying professions that represent good matches for low SES individuals can increase equality and upward socioeconomic movement. SES
3
If self-selection into accounting versus other fields were to follow a traditional model, then it is possible that there would be no meaningful variation in self-selection beyond the vector of attributes affecting the enjoyment of
accounting and the marginal costs of acquiring accounting skills Willis and Rosen 1979; Guasch and Weiss 1981; Polachek 1981. However, choosing to pursue accounting does not imply aptitude for accounting Oswick and Barber
1998; Blay and Fennema 2017 and does not imply enjoyment of accounting Madsen 2015. Moreover, marginal costs of entry into a field, such as earning an accounting degree, can be high independent of aptitude, as is the case
when SES is low McDonough 1997. Thus, a different lens is likely useful to understanding the selection decision.
8 also links to the diversity of human capital, which professions pursue but have achieved with mixed
success Abbott 1988; Hammond 2002; Sullivan Commission 2004; Madsen 2013. In general, low SES individuals confront social and economic barriers to professional success, as low SES is
associated with lower college attendance and higher college dropout rates DeAngelo et al. 2011; Chetty et al. 2017. Rivera 2015 reports that low SES college graduates are less likely than their
high SES counterparts to get jobs in elite law, banking, and consulting firms, even when they graduate from the same institutions and have better grades. In addition to these barriers, low SES
is associated with lower emotional resilience to stress, further diminishing the likelihood of success in higher education and in difficult jobs Bowles et al. 2005. In one study of entry-level
accountants, low SES individuals perform as well as their high SES counterparts but exit at higher rates Collarelli et al. 1987. The authors offer no explanations for this finding, but it does raise
the possibility that low SES individuals are an underutilized source of quality human capital. Moreover, this study focuses on SES because a person’s SES likely influences the appeal
of the accounti ng profession’s relative security, specifically its tradeoff between costs of entry and
relative security. Accounting requires significant investment in human capital, such as Bachelor’s and sometimes Master’s degrees, certifications, and ongoing education. In turn, the accounting
labor market exhibits persistently low unemployment, stable demand that is robust to economic conditions, and low wage variance AICPA 2013; Bureau of Labor Statistics 2015.
We argue that SES affects self-selection into accounting by influencing the compatibility between these fundamental attributes of accounting and a person’s broader
life history strategy
. In the subsections that follow, we discuss life history strategies and the effect of SES on the
composition of the pool of potential entrants into accounting. Because a necessary condition of entry is the costly choice to invest resources of time, money, and effort in education, we first
9 examine the choice to attend college. As far as we are aware, no existing studies offer theoretical
explanations as to how this costly choice reflects a set of deeper fundamental life history differences, particularly in low SES individuals. Our theory allows us to better define the potential
labor market entrants over whom accounting and other fields compete. Among this group of potential entrants, we then examine the choice of accounting over other options.
2.1. Life History Theory and College Attendance The idea of life history strategies originated in evolutionary biology. This theory seeks to
explain how organisms including humans trade off current versus future resource consumption at different points in their lifespans Schaffer 1983; Kaplan and Gangestad 2005. While early
applications of life history theory focused on tradeoffs to increase survival odds or reproductive fitness, over the past two decades this theory has been applied more broadly to understand issues
in the social sciences, including in economics, marketing, psychology, and sociology. For example, Wang and Dvorak 2010
draw on the theory’s biological roots to examine temporal discounting, i.e., preferring smaller immediate payoffs over larger future payoffs. The authors find
that temporal discounting decreases in response to an experimental manipulation in which half of participants consume a soft drink prior to the task
—that is, temporarily increasing blood glucose levels and the subjective sense that daily energy needs are fulfilled affects a common economic
tendency. This is one of many examples in which life history theory and its biological foundations are useful to understanding contemporary psychological and economic issues.
For our study, career selection is well suited for examination as part of a life history strategy, because selection is an action generally taken at a given point in the lifespan i.e., early
adulthood and involves complex tradeoffs affecting current and future resource acquisition and allocation. For example, career selection involves tradeoffs between current versus future resource
10 usage at key points throughout life
—such as pursuing post-secondary education versus working full-time immediately after high school.
Life history strategies vary along a fastslow continuum Ellis et al. 2009. Slower as opposed to faster strategies are consistent with longer over shorter horizons, prioritizing saving
over consumption, avoiding over accepting risks, among other distinctions e.g., Kaplan and Gangestad 2005; Griskevicius et al. 2013.
4
The trajectory towards faster or slower life history strategies begins early in life, with harsher, more uncertain childhood environments
—such as those characterized by low SES or exposure to violence or disease
—associated with a trajectory towards faster strategies Wilson and Daly 1997; Low et al. 2008; Brumbach et al. 2009; Ellis et al. 2009.
5
For example, people from harsher childhood environments follow a faster life history trajectory in adolescence and adulthood with riskier and earlier sexual activity, higher rates of smoking, and
lower impulse control Seltzer and Oechsli 1985; Wilson and Daly 1997; Soteriades and DiFranza 2003; Hanson and Chen 2007; Nettle 2010; Hill et al. 2016. These effects extend to economic
decision making, as there are conditions in which people who grew up in harsher environments have higher rates of credit card debt, are less willing to purchase insurance, and make riskier
investment choices, indicating faster life history strategies Griskevicius et al. 2011b; 2013; Mittal and Griskevicius 2016.
Life history theory allows us to develop nuanced predictions about the effect of SES on selection into accounting. We begin by discussing the effect of low SES on the pool of potential
4
Biologists such as Stearns 1989 originally characterized the fundamental tradeoff in life history strategies as somatic effort
towards physical and mental growth versus reproductive effort towards attracting and retaining mates and caring for children. Through broader application of the theory to other fields, researchers have characterized the
tradeoffs more broadly to include things like risk and time horizon. Griskevicius et al. 2011a analogize the tradeoff to putting m
oney into a savings account versus spending the money to help perpetuate the account holder’s survival.
5
The term “strategy” does not imply that a set of actions are good or bad, or even that the person consciously
undertakes each action constituting a life history strategy. Some early life tradeoffs relevant to our study are determined by parents or social institutions, rather than choices of the individual, such as low SES limiting access to
early childhood education McDonough 1997.
11 entrants into accounting, i.e., college attendees. Because lower SES implies a disadvantaged
position and thus an initially faster trajectory, having the option to pursue higher education suggests that a low SES individual has deviated from that trajectory through a series
of “slower” choices as an adolescent. People from poorer backgrounds who have the option to attend college
likely made “slow” tradeoffs to invest in education, delay gratification, and avoid risks in adolescence in order to overcome their disadvantaged initial position.
For example, Chen and Miller 2012 document a “shift and persist” life history strategy among some low SES individuals, indicated by high resilience, optimism, and pride in one’s
achievements. Such resilience at younger ages is increasing in intelligence and self-esteem, and helps low SES individuals manage stress and adapt to social circumstances at older ages Masten
et al. 1990; Brody et al. 2013. This is consistent with evidence that low SES is
positively
associated with pursuing a college education among those who exhibit resilience, e.g., by holding jobs and demonstrating financial responsibility during adolescence Brumbach et al. 2009.
Thus, we argue that, among college attendees, the distribution of life history strategies is likely narrower when SES is low, because the initial advantages of high SES offer more wiggle
room for risky or myopic choices, yet retain opportunities such as higher education. Consequently, college attendees are likely to have followed slower life history strategies than have non-attendees,
and this difference is likely to be significantly greater when SES is low. This enriches existing literature, which generally observes that higher SES and educational attainment individually are
associated with positive health and life outcomes, but does not examine interactive effects. We predict that the opportunity to choose to go to college likely signals that a person from
a poorer socioeconomic background has had a slower life history strategy in the past, as indicated by choices during adolescence and adulthood that are consistent with a slower strategy. It is also
12 likely that pursuing college is a more credible signal of life history strategies among people from
poorer, as opposed to wealthier backgrounds. This leads to our first hypothesis,
Hypothesis 1:
College attendees’
choices are more consistent with slower life history strategies than those of non-attendees, and this difference is greater for lower, as
opposed to higher SES individuals.
2.2. Life History Theory and Self-Selecting into Accounting over Other Options Among fields requiring a college education, choosing accounting over other options
represents a relatively slow strategy. Jobs in the accounting profession often require incremental human capital investments, in the form of a master’s degree, certification e.g., CPA, CMA, and
continuing professional education. In turn, accounting offers incremental short- and long-term security in the form of low unemployment, stable demand, and salaries that deliver comparable
returns to other business fields Bureau of Labor Statistics 2015; Madsen 2015. Based on the development of hypothesis one, the set of potential entrants into the
accounting labor market comprises low SES individuals with predominately slow life history strategies, in addition to high SES individuals who have a broader array of strategies. Thus, all
else equal, we predict that low SES is likely to increase the likelihood of self-selection of college attendees into accounting
—that is, low SES individuals will be disproportionately represented in accounting relative to the set of all other fields. This leads to our second hypothesis:
Hypothesis 2:
Low SES individuals select into accounting to a greater degree than non- accounting business fields and all non-accounting fields.
2.3. The Moderating Effect of Recessions The effect of SES on self-selection into accounting is likely to differ across good and bad
economic conditions. Although life history strategies develop early, they are not fixed and their trajectories can change in response to cues in a
person’s current environment Griskevicius et al. 2011a; b; 2013. That is, people re-calibrate towards slower or faster life history strategies in
13 response to indicators of potential changes in resource availability or life expectancy e.g.,
recessions, crime rates. Childhood SES affects how people re-calibrate preferences based on environmental cues,
and does so throughout childhood and adulthood Ellis et al. 2009; Griskevicius et al. 2011b. Among adults, lower childhood SES is associated with lower p
erceived control over one’s environment Chen and Miller 2012; Mittal and Griskevicius 2014 and lower impulse control
capabilities Kochanska et al. 2001; Hill et al. 2016. Also, low childhood SES is associated with poor health outcomes among adults, and this association is driven by childhood SES but not
adulthood SES Currie and Stabile 2003; Cohen et al. 2004; Hanson and Chen 2007. Hackman et al. 2010 discuss evidence of biological and physiological differences between people who grew
up with low, as opposed to high SES. This includes fMRI evidence of different brain structures for areas involved with problem-solving and threat detection.
In other words, people are physically and psychologically sensitized to the conditions that they observe during childhood. If a person observes adverse conditions like resource scarcity while
making a key decision, then the person’s choice is likely to re-calibrate towards the trajectory adopted in childhood, i.e., when facing adverse conditions, poorer wealthier backgrounds lead to
choices consistent with faster slower strategies. Thus, we expect an interactive effect of SES and macroeconomic conditions on self-
selection into accounting. Although a person from a poorer background may have altered trajectories during adolescence towards a slower strategy and investment in education, the
trajectory of subsequent choices such as field of study and career are likely to vary depending on
14 whether they make the choice in benign, as opposed to uncertain economic conditions.
6
There is ample evidence to support this logic. In a series of experiments, Griskevicius et al. 2013 find that
people who grew up in poorer environments exhibit greater risk-taking and temporal discounting when they observe cues of resource scarcity, as opposed to neutral cues. By contrast, these
behaviors decrease when childhood SES is high. Similarly, observing cues of current environmental uncertainty decreases low SES individuals’ impulse control, willingness to delay
consumption, and willingness to purchase insurance, but has opposite effects among high SES individuals Griskevicius et al. 2011b; 2013; Mittal and Griskevicius 2014; 2016.
Applied to our setting, uncertain macroeconomic conditions like recessions are likely to weaken preferences for the relatively slow attributes of accounting among those low SES
individuals who have already entered college and are, therefore, in the set of potential entrants into accounting. That is, while low SES is likely to increase the preference for accounting in benign
economic conditions, it is likely to decrease this preference in uncertain macroeconomic conditions. Thus, we predict an interaction in which the effect of SES on self-selection into
accounting depends on whether or not there is a recession, i.e., conditions of resource scarcity.
Hypothesis 3:
Selection into accounting among low SES individuals decreases in uncertain, as opposed to benign macroeconomic conditions. This effect is stronger in
accounting than in non-accounting business fields and all non-accounting fields.
6
Life history strategy comprises a broad array of social, psychological, and economic considerations such as risk aversion, temporal discounting, impulsivity, sexual activity, parental duties, etc. We have considered purely economic
explanations for our predictions, but cannot conceive of a comprehensive and parsimonious explanation. Theory and evidence on the relation between wealth and, for example, risk aversion is difficult to apply to our setting, as it
primarily focuses on portfolio settings Arrow 1971; Paravisini et al. 2010. Absolute risk aversion is decreasing in wealth i.e., incremental wealth increases the absolute level of investment in risky assets but relative risk aversion is
increasing in wealth i.e., incremental wealth decreases the percentage of total wealth that is invested in risky assets. This would not explain H2 or H3. More broadly, as a theoretical example, it is possible that, if risk aversion is a
concave function of wealth, then all else equal, low SES individuals occupy a steeper part of the curve than do high SES individuals and are thus more risk averse. This would increase the preference for accounting. However, this
would not explain H3, as recessions would simply shift both high SES and low SES individuals down the curve and make each group more risk averse, increasing the preference for accounting among both groups.
15
3. Tests of H1
