The Impacts of Romantic Relationships with the Boss

Romantic relationships in the workplace are common, but those between managers and subordinates have increasingly drawn scrutiny. Using administrative data on the universe of cohabiting couples in Finland, we examine the career implications of starting or ending a personal relationship with a workplace manager and the spillovers of these relationships on the broader workforce. An event study design reveals that entering a relationship with a manager increases the subordinate's earnings by 6%, but breaking up triggers an abrupt 18% earnings decline. We also find that these relationships generate spillovers: retention of other workers declines by six percentage points, with effects concentrated in workplaces where subordinates experience greater earnings gains. Our findings highlight both the private benefits and organizational costs of hierarchical workplace relationships