Real Effects of Financial Distress of Workers: Evidence from Teacher Spillovers

39 Pages Posted: 3 Aug 2016  

Gonzalo Maturana

Emory University - Goizueta Business School

Jordan Nickerson

Boston College

Date Written: May 25, 7

Abstract

This paper studies the effects of financial distress on the productivity of workers. Using detailed data from the public school system in Texas, which allows us to exploit within-teacher variation and to control for a student's economic environment, we show that student performance decreases by 1.7% following a declaration of bankruptcy by their teacher. The effect of financial distress increases with the complexity of the task: Students designated as "at-risk" experience a 5.7% decrease in performance after their teacher files for bankruptcy. Our results indicate that the financial distress of workers can have important consequences for the economy.

Keywords: Bankruptcy, Labor, Worker Productivity, Education

JEL Classification: J01, I20, D10

Suggested Citation

Maturana, Gonzalo and Nickerson, Jordan, Real Effects of Financial Distress of Workers: Evidence from Teacher Spillovers (May 25, 7). Available at SSRN: https://ssrn.com/abstract=2817470 or http://dx.doi.org/10.2139/ssrn.2817470

Gonzalo Maturana

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

HOME PAGE: http://www.gonzalomaturana.com/

Jordan Nickerson (Contact Author)

Boston College ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

Paper statistics

Downloads
46
Abstract Views
368