Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • February 2021
  • Article
  • Journal of Finance

Do Household Wealth Shocks Affect Productivity? Evidence from Innovative Workers During the Great Recession

By: S. Bernstein, T. McQuade and R. Townsend
  • Format:Print
ShareBar

Abstract

We investigate how the deterioration of household balance sheets affects worker productivity, and, in turn, economic downturns. Specifically, we compare the output of innovative workers who experienced differential declines in housing wealth during the financial crisis but were employed at the same firm and lived in the same metropolitan area. We find that, following a negative wealth shock, innovative workers become less productive and generate lower economic value for their firms. The reduction in innovative output is not driven by workers switching to less innovative firms or positions. These effects are more pronounced among workers at greater risk of financial distress.

Keywords

Great Recession; Household; Financial Condition; System Shocks; Employees; Performance Productivity

Citation

Bernstein, S., T. McQuade, and R. Townsend. "Do Household Wealth Shocks Affect Productivity? Evidence from Innovative Workers During the Great Recession." Journal of Finance 76, no. 1 (February 2021): 57–111.
  • Find it at Harvard

About The Author

Shai Benjamin Bernstein

Entrepreneurial Management
→More Publications

More from the Authors

    • 2023
    • Faculty Research

    Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy

    By: Shai Benjamin Bernstein, Emanuele Colonnelli, Mitchell Hoffman and Benjamin Iverson
    • December 7, 2022
    • Harvard Business Review Digital Articles

    Why Decentralized Crypto Platforms Are Weathering the Crash

    By: Shai Bernstein and Scott Duke Kominers
    • December 2022 (Revised December 2022)
    • Faculty Research

    Ribbit Capital and the Gauntlet Investment Opportunity

    By: Shai Bernstein and Allison M. Ciechanover
More from the Authors
  • Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy By: Shai Benjamin Bernstein, Emanuele Colonnelli, Mitchell Hoffman and Benjamin Iverson
  • Why Decentralized Crypto Platforms Are Weathering the Crash By: Shai Bernstein and Scott Duke Kominers
  • Ribbit Capital and the Gauntlet Investment Opportunity By: Shai Bernstein and Allison M. Ciechanover
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College