Do Financial Concerns Make Workers Less Productive?

A sample of low-income Indian manufacturing workers is used to test the hypothesis that reducing worries over financial concerns can raise productivity. Some workers are given cash infusions while others aren't, and those who receive the infusions (and have higher overall liquidity) are found to reduce their financial concerns by immediately paying off debts and buying household essentials. Subsequently, their productivity rises by 7.1%, while making fewer costly mistakes.


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