Does easing the financial stress of short-term workers by paying them earlier lead to productivity improvements?
Audio file
The mental strain of living in poverty undoubtedly causes a significant psychological load on the poor. Yet, policymakers and academics have often neglected the effect of such stress as a source of lower productivity amongst poorer workers. An innovative experiment in rural India targeted alleviating financial stress on short-term workers and fascinatingly, found a substantial increase in productivity for workers who have their financial strain eased by receiving part of their salary mid-way through their contract.