The Effect of Wealth Shocks on Shirking: Evidence from the Housing Market
63 Pages Posted: 19 Jun 2018 Last revised: 27 Dec 2021
Date Written: April 6, 2021
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
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