Financing Labor

Efraim Benmelech*, Nittai Bergman, Amit Seru

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

29 Scopus citations

Abstract

Financial market imperfections can have significant impact on employment decisions of firms. We illustrate the economic importance of this channel by showing that employment decisions are constrained by firms' financial health and liquidity. Our main analysis uses a collage of three "quasi-experiments" to trace the effects of finance on employment. The 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)
Pages (from-to)1365-1393
Number of pages29
JournalReview of Finance
Volume25
Issue number5
DOIs
StatePublished - Sep 1 2021

Keywords

  • Employment
  • Financial constraints
  • Labor

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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