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Payday and the Monthly Attention Cycle of Low-Wage Workers

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  • Lelarge, Claire

Abstract

Using linked survey and administrative wage records, we measure workers’ financial monitoring through the accuracy of their self-reported earnings. An unsupervised latent-class model distinguishes transitory reporting errors from rounding behavior and persistent reporting biases, allowing us to interpret lower reporting uncertainty as more precise knowledge of one’s wages. Among low-wage workers, reporting precision exhibits a pronounced pay-cycle pattern: it increases by approximately 12 percent in the days leading up to payday and declines immediately afterward. No comparable pattern emerges among higher-wage workers. These findings suggest that predictable liquidity constraints lead low-wage workers to monitor their personal finances more closely as payday approaches.

Suggested Citation

  • Lelarge, Claire, 2026. "Payday and the Monthly Attention Cycle of Low-Wage Workers," CEPR Discussion Papers 21775, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:21775
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    Keywords

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    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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