Publication Type

Journal Article

Version

acceptedVersion

Publication Date

3-2025

Abstract

I examine whether, and through which channels, government pension accounting regulations affect local housing markets and economies. Using both a contiguous border-county approach across multiple states and a single-state study in California, I find that regions exposed to more severe state-level pension underfunding experience lower housing market growth after the introduction of Government Accounting Standards Board (GASB) regulations 67 and 68, which significantly enhance the transparency of public pension underfunding. The effect is more pronounced in states heavily impacted by the new regulations and in counties more reliant on state funding. Further analyses suggest that the observed effect is driven by the responses of sponsoring governments and real estate investors to the newly disclosed pension underfunding information. Additionally, more underfunded governments tend to increase taxes, reduce spending, and experience declines in local economic activity following the implementation of these new regulations.

Keywords

pension underfunding, housing market, public accounting regulations, economic consequences, local economies

Discipline

Accounting | Corporate Finance | Real Estate

Research Areas

Corporate Governance, Auditing and Risk Management

Publication

Accounting Review

First Page

1

Last Page

27

ISSN

0001-4826

Identifier

10.2308/TAR-2022-0473

Publisher

American Accounting Association

Embargo Period

4-20-2025

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.2308/TAR-2022-0473

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