Financially Stressed Employees

40 Pages Posted: 21 Apr 2021 Last revised: 2 May 2021

See all articles by Roberto Pinto

Roberto Pinto

Lancaster University Management School

Date Written: April 9, 2021

Abstract

I use variation in US consumer bankruptcy laws to study the impact of employees' financial well-being on corporate performance. I find that better employees' financial well-being leads to higher firm profitability and labor productivity. The cross-sectional analysis finds more pronounced effects for more human capital intensive firms and those with fewer routine tasks. These results indicate that workers' financial hardship impairs workplace performance, especially in sectors where cognitive skills directly affect productivity. Overall, my findings suggest that policies promoting individuals' financial well-being have positive spillover effects on corporate performance.

Keywords: Consumer bankruptcy, employees well-being, 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 Management School ( email )

Bailrigg, Lancaster
Lancaster, LA1 4YX
United Kingdom

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

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