Employee Output Response to Stock Market Wealth Shocks

By Teng Li, Wenlan Qian, Wei A Xiong, Xin Zou

Research output: Contribution to conferencePaperpeer-review


This paper uses individual-level data linking stock investments to work performance to examine how changes in stock market wealth affect worker output. We document a 10% increase in monthly stock investment returns is associated with a decrease of 3.8% in the same investor’s next-month work output. The negative output response is not driven by concurrent economic conditions and is pronounced when focusing on more idiosyncratic stock investment returns. Moreover, it is unexplained by investor-specific liquidity needs. Consistent with the wealth-effect interpretation, the effect is stronger for higher-income workers. In the negative-return domain, interestingly, a decline in stock investment returns is followed by lower output, especially for male, younger, less educated, and lower-income workers. Overall, our results highlight a novel channel of transmitting stock market fluctuation to the real economy through labor supply.
Original languageEnglish
Number of pages57
Publication statusPublished - Jul 2021
Event2021 China International Conference in Finance (CICF) - Shanghai, China
Duration: 6 Jul 20219 Jul 2021
https://www.cicfconf.org/2021/m/index.html (Conference website)
https://editorialexpress.com/conference/CICF2021/program/CICF2021.html (Conference program)


Conference2021 China International Conference in Finance (CICF)
Internet address

User-Defined Keywords

  • Stock Investment Return
  • Stock Market Wealth
  • Consumption
  • Worker Output
  • Work Performance
  • Labor Supply
  • Wealth Effect
  • Household Finance


Dive into the research topics of 'Employee Output Response to Stock Market Wealth Shocks'. Together they form a unique fingerprint.

Cite this