Financially Stressed Employees

40 Pages Posted: 21 Apr 2021 Last revised: 4 Oct 2023

See all articles by Roberto Pinto

Roberto Pinto

Lancaster University - Lancaster University Management School

Date Written: April 9, 2021

Abstract

This paper shows that employees' financial well-being affects labor productivity and corporate performance. By exploiting the institutional framework of the US consumer bankruptcy, I find that policies improving employees' financial well-being lead to higher firm profitability and labor productivity. The cross-sectional analysis highlights more pronounced effects for human capital intensive firms and those with fewer routine tasks. These results indicate that workers' financial hardship impairs workplace performance, especially in sectors where employees' cognitive skills influence their productivity. Overall, my findings suggest that promoting individuals' financial well-being has positive spillover effects on corporate performance.

Keywords: consumer bankruptcy, employees well-being, labor productivity, corporate performance.

JEL Classification: G32, K35, J24

Suggested Citation

Pinto, Roberto, Financially Stressed Employees (April 9, 2021). Available at SSRN: https://ssrn.com/abstract=3823267 or http://dx.doi.org/10.2139/ssrn.3823267

Roberto Pinto (Contact Author)

Lancaster University - Lancaster University Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

HOME PAGE: http://https://sites.google.com/view/roberto-pinto/home

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