Abstract
The creation and destruction margins of employment (job flows) can be used to measure the employment effects of disruptions to firm credit. Using a firm dynamics model, we establish that a tightening of credit to firms reduces employment primarily by reducing gross job creation, exhibiting stronger effects at new, young, and middle-sized firms. The firm credit channel accounts for, at most, 18%, of the decline in US employment in the Great Recession. Using MSA-level job flows data, we show that the job flows response to identified credit shocks is consistent with our model’s predictions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
