Working from Home, Managerial Sentiment, and Corporate Policies during COVID-19
61 Pages Posted: 30 Apr 2021 Last revised: 4 Jun 2021
Date Written: June 1, 2021
COVID-19 lockdowns and stay-at-home orders have forced many individuals to work from home and led to diverse isolation-induced mental health problems, including depression, stress, and pessimism biases. Using the granularity of foot traffic data during the 2020 pandemic year, we show that social isolation when working from home has strong negative effects on managerial sentiment. The evidence is robust to the identification strategy exploiting the staggered implementation of stay-at-home orders across the United States and alternative measures of managerial sentiment. Further analysis suggests that the COVID-19 isolation-induced managerial sentiment plays a role in corporate policies – homebound managers tend to adopt conservative corporate policies.
Keywords: COVID-19 Isolation, Work from Home, Pessimism Biases, Managerial Sentiment, Corporate Policy
JEL Classification: G3, G4, G14, I18
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