Do Financial Concerns Make Workers Less Productive?

Research Question

The paper tests whether financial concerns distract workers sufficiently to meaningfully reduce their productivity, and whether receiving cash — by alleviating those concerns — can raise output even when total compensation is held fixed.

Setting and Sample

The experiment involves 408 low-income male agricultural casual laborers in rural Odisha, India, recruited from 47 villages across five worksites in four districts. The study takes place during the lean agricultural season (March–June 2017 and 2018), when formal employment is scarce (workers found paid wage work on only 1.9 days per week on average). During this period, 86% of workers reported being “worried” or “very worried” about their finances, 68–71% carried outstanding loans, and 64–66% said they would have difficulty coming up with Rs. 1,000 (roughly four days of wages) in an emergency. Workers bring these burdens to the job: on a given day, approximately one in two workers reported thinking about financial worries while working.

Lives Versus Livelihoods: The Impact of the Great Recession on Mortality and Welfare

Research Question. Does the Great Recession reduce or increase mortality, and what are the welfare implications of incorporating recession-induced mortality changes into standard macroeconomic welfare frameworks?

Setting and Identification. The authors exploit spatial variation in the severity of the 2007–2009 Great Recession across 741 U.S. Commuting Zones (CZs), following the empirical design of Yagan (2019). The primary shock variable is the percentage-point change in the CZ unemployment rate between 2007 and 2009. The key identifying assumption is that no concurrent shocks to mortality coincide with the timing and geographic pattern of the Great Recession shock. Pre-trend evidence supports this: CZs subsequently harder hit experienced a slight relative increase in mortality before 2007, which is the opposite sign from the main effect, supporting the validity of the design.

Frank Schilbach | Macro Paper Warehouse

Do Financial Concerns Make Workers Less Productive?

Research Question

Setting and Sample

Lives Versus Livelihoods: The Impact of the Great Recession on Mortality and Welfare