@article{1692cc87ad474da6ae1f1bccd94dee40,
title = "Employee Output Response to Stock Market Wealth Shocks",
abstract = "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.",
keywords = "Consumption, Household Finance, Labor supply, Reference Dependence, Stock investment return, Stock market wealth",
author = "Teng Li and Wenlan Qian and Xiong, {Wei A} and Xin Zou",
note = "Funding Information: David Hirshleifer was the editor for this article. We benefited from comments from Sumit Agarwal, Zhiwu Chen, Sudipto Dasgupta, Zhenyu Gao, Bing Han, Wenxi Jiang, Xiaomeng Lu, Jun Qian, David Reeb, Jay Ritter, Johan Sulaeman, Yizhou Xiao, Hong Yan, and seminar participants at 2021 CICF, Erasmus University Rotterdam, Shanghai Advanced Institute of Finance, Chinese University of Hong Kong, Shanghai Jiaotong University, Hong Kong University, and National University of Singapore. Li acknowledges the support of the Youth Program of the National Natural Science Foundation of China (72003202). Qian acknowledges the financial support from MOE Tier 2 Grant (R-315–000–129–112). Wei A. Xiong acknowledges support from the National Natural Science Foundation of China (Project Number 71703104). The views in this paper are those of the authors and do not reflect those of the Shenzhen Stock Exchange. All errors are our own. Funding Information: David Hirshleifer was the editor for this article. We benefited from comments from Sumit Agarwal, Zhiwu Chen, Sudipto Dasgupta, Zhenyu Gao, Bing Han, Wenxi Jiang, Xiaomeng Lu, Jun Qian, David Reeb, Jay Ritter, Johan Sulaeman, Yizhou Xiao, Hong Yan, and seminar participants at 2021 CICF, Erasmus University Rotterdam, Shanghai Advanced Institute of Finance, Chinese University of Hong Kong, Shanghai Jiaotong University, Hong Kong University, and National University of Singapore. Li acknowledges the support of the Youth Program of the National Natural Science Foundation of China ( 72003202 ). Qian acknowledges the financial support from MOE Tier 2 Grant ( R-315–000–129–112 ). Wei A. Xiong acknowledges support from the National Natural Science Foundation of China (Project Number 71703104 ). The views in this paper are those of the authors and do not reflect those of the Shenzhen Stock Exchange. All errors are our own. Publisher Copyright: {\textcopyright} 2021 Elsevier B.V.",
year = "2022",
month = nov,
doi = "10.1016/j.jfineco.2021.11.005",
language = "English",
volume = "146",
pages = "779--796",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "2",
}
