Employee Output Response to Stock Market Wealth Shocks

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

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    1 Citation (Scopus)


    This paper uses individual-level data linking stock investments with work performance to examine how changes in stock market wealth affect worker output. We document that a 10% increase in monthly income from stock market investments 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 unexplained by investor-specific liquidity needs. Consistent with the reference dependence interpretation, the response is short-lived and the effect is stronger when the total income has reached a reference income. Overall, our results highlight a novel channel of transmitting stock market fluctuation through labor supply.
    Original languageEnglish
    Pages (from-to)779-796
    Number of pages18
    JournalJournal of Financial Economics
    Issue number2
    Early online date21 Dec 2021
    Publication statusPublished - Nov 2022

    Scopus Subject Areas

    • Economics and Econometrics
    • Accounting
    • Finance
    • Strategy and Management

    User-Defined Keywords

    • Consumption
    • Household Finance
    • Labor supply
    • Reference Dependence
    • Stock investment return
    • Stock market wealth


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