Do Financial Concerns Make Workers Less Productive
Bibliographic Data
| ID | 19036637 |
|---|---|
| Authors | Supreet Kaur (0000-0002-3756-0007, University of California Berkeley and National Bureau of Economic Research, corresponding author), Sendhil Mullainathan (0000-0001-8508-4052, Massachusetts Institute of Technology and National Bureau of Economic Research ,), Suanna Oh (0000-0002-2650-6363, Paris School of Economics), Frank Schilbach (0000-0002-8022-6725, Massachusetts Institute of Technology and National Bureau of Economic Research ,) |
| Year | 2024 |
| Volume | 140 |
| Issue | 1 |
| Pages | 635-689 |
| Publication date | 2024-11-27 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Quarterly Journal of Economics (JOURNAL) |
| Journal identifiers | ISSN: 0033-5533 • E-ISSN: 1531-4650 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1093/qje/qjae038 |
| OpenAlex | W3124047731 |
| Language | EN |
| Citations received | 5 |
| References cited | 45 |
Workers who are worried about their personal finances may find it hard to focus at work. If so, reducing financial concerns could increase productivity. We test this hypothesis in a sample of low-income Indian piece-rate manufacturing workers. We stagger when wages are paid out: some workers are paid earlier and receive a cash infusion while others remain liquidity constrained. The cash infusion leads workers to reduce their financial concerns by immediately paying off debts and buying household essentials. Subsequently, they become more productive at work: their output increases by 7% (0.11 std. dev.), and they make fewer costly, unintentional mistakes. Workers with more cash on hand thus not only work faster but also more attentively, suggesting improved cognition. These effects are concentrated among more financially constrained workers. We argue that mechanisms such as gift exchange or nutrition cannot account for our results. Instead, our findings suggest that financial strain, at least partly through psychological channels, has the potential to reduce earnings exactly when money is most needed
Business · Economics · Labour economics · Financial Literacy, Pension, Retirement Analysis · Finance
The Psychological Lives of the Poor
Priming, Replication, and the Hardest Science
On the psychology of poverty
Money in the Mental Lives of the Poor
The Short-term Impact of Unconditional Cash Transfers to the Poor
Inference on Treatment Effects after Selection among High-Dimensional Controls
Poverty, depression, and anxiety
Scarcity Frames Value
Labor Markets and Poverty in Village Economies
Poverty and Economic Decision-Making
Poverty Impedes Cognitive Function
Smoothing Consumption by Smoothing Income
Factorial Designs, Model Selection, and (Incorrect) Inference in Randomized Experiments
Do Financial Concerns Make Workers Less Productive
Poverty identity and preference for challenge
Job Queues and Layoffs in Labor Markets with Flexible Wages
Poor and Rational
Minimum Wage and Individual Worker Productivity
Self-Control at Work
Psychological Effects of Poverty on Time Preferences
Inequality as a Determinant of Malnutrition and Unemployment
| Unique citing works | 5 |
|---|---|
| Citations per year | 2,5 |
| Citation span | 2024 - 2026 (3) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 5 |