Busy analysts in uncertain times

We assess the disturbing impact of economic policy uncertainty on forecasting activities of sell-side analysts. Based on analysts’ earnings forecasts for Korean listed companies for 2001–2019, we document that each analyst issues more earnings forecasts and covers more firms and industries in uncertain periods. More importantly, we find that the heightened workload per analyst is positively associated with forecast errors during the uncertain periods. We extend prior studies by providing a labor-centric explanation of lower forecast quality in uncertain times.