The price of financial precarity: Personal finance as a barrier to work performance

In this paper, we examine the influence of a person’s financial worry on his or her ability to perform at work. Across two studies, we show that people who are worried about their financial situation have less working memory available to them, which subsequently spills over into their work performance. In Study 1, we demonstrate this relationship in a field study with short-haul truck drivers where we combine survey responses with lagged archival data on preventable accidents. We find that a one standard deviation increase in financial worry is associated with a 4.4% increase in the odds of a preventable accident through its influence on working memory – a comparable effect than that of cell phone use while driving. In Study 2, we establish the causal ordering among the variables by manipulating financial worry and confirming its relationship with performance through decrements in working memory. Our research is the first to explicitly develop and test theory regarding the effect of employee finances on t...