Almost Famous: How Wealth Shocks Impact Career Choices

Abstract

We study the short and long-term career effects of shocks to household balance sheets using a novel dataset of workers in the film industry in the wake of the Great Recession. We find that individuals within the same county and occupation who lost more housing wealth reduce their participation in films with other high-profile talents (individuals that have won prestigious awards), films that are positively rated, and films that are likely to win awards, but they increase involvement in small productions. We control for local labor demand shocks by comparing homeowners to renters. These wealth losses also have adverse long-term consequences on the probability of leading roles, individuals' popularity, and film quality. Overall, our results suggest that wealth shocks distort non-salaried workers' labor decisions due to liquidity concerns and impact individuals' career paths.

Keywords: Career Choices, Job Search, Employer/Employee Matching, Long-term Effects, Wealth Shocks, Household Finance, Labor Economics, Real Estate