Financing Labor

Efraim Benmelech, Nittai K. Bergman, Amit Seru

Research output: Working paper

Abstract

Financial market imperfections can have significant impact on employment decisions of firms. We illustrate the economic importance of this channel by demonstrating that the responsiveness of employment decisions to firms' financial health is quantitatively similar to the much-studied responsiveness of investment decisions to cash-flows. We use a collage of three 'quasi-experiments' used previously in the investment-cash flow and finance-growth literatures to trace the effects of finance on employment. Our results suggest that financial constraints and the availability of credit play an important role in firm-level employment decisions, as well as aggregate unemployment outcomes.
Original languageEnglish (US)
PublisherNational Bureau of Economic Research (NBER)
DOIs
StatePublished - 2011

Publication series

Name
No.17144

Fingerprint

Labor
Financing
Responsiveness
Cash flow
Finance and growth
Financial markets
Financial constraints
Credit
Unemployment
Quasi-experiment
Finance
Financial health
Economics
Market imperfections
Investment decision

Cite this

Benmelech, E., Bergman, N. K., & Seru, A. (2011). Financing Labor. National Bureau of Economic Research (NBER). https://doi.org/10.3386/w17144
Benmelech, Efraim ; Bergman, Nittai K. ; Seru, Amit. / Financing Labor. National Bureau of Economic Research (NBER), 2011.
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Benmelech, E, Bergman, NK & Seru, A 2011 'Financing Labor' National Bureau of Economic Research (NBER). https://doi.org/10.3386/w17144

Financing Labor. / Benmelech, Efraim; Bergman, Nittai K.; Seru, Amit.

National Bureau of Economic Research (NBER), 2011.

Research output: Working paper

TY - UNPB

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Benmelech E, Bergman NK, Seru A. Financing Labor. National Bureau of Economic Research (NBER). 2011. https://doi.org/10.3386/w17144