Housing Booms and Shirking

Abstract

This paper studies the effect of housing wealth shocks on workplace shirking. We use the type and actual time stamps of credit card transactions to detect non-work-related behavior during work hours. After positive shocks to house prices, affected homeowners experienced a fast and persistent increase (by 19% per month) in their propensity to use work hours to attend to personal needs. The post-shock response is more pronounced among homeowners with a greater wealth increase, with poorer career potential, or for occupations with higher monitoring costs. Our estimate implies an elasticity of shirking propensity with respect to house price of 3.8.

Keywords: Labor supply, shirking, effort, wealth effect, housing wealth, incentive cost, productivity, credit card, household finance, China

JEL Classification: J22, R3, D1, E21, G21