I use variation in US consumer bankruptcy laws to study the impact of employees' financial well-being on corporate performance. I find that better employees' financial well-being leads to higher firm profitability and labor productivity. The cross-sectional analysis finds more pronounced effects...

Using state-level generosity of US consumer bankruptcy laws, this paper documents corporate implications of gains in workforce financial well-being. First, I show that more generous consumer bankruptcy laws reduce absences due to illness and increase labor productivity and firm profitability....