Financing Labor

Efraim Benmelech; Nittai Bergman; Amit Seru

doi:10.1093/rof/rfab013

Financing Labor

Efraim Benmelech, Nittai Bergman, Amit Seru

School of Economics

Tel Aviv University

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	1365-1393
Number of pages	29
Journal	Review of Finance
Volume	25
Issue number	5
DOIs	https://doi.org/10.1093/rof/rfab013
State	Published - 1 Sep 2021

Keywords

Employment
Financial constraints
Labor

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics

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10.1093/rof/rfab013

Cite this

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title = "Financing Labor",

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.",

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AB - 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.

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Financing Labor

Abstract

Keywords

All Science Journal Classification (ASJC) codes

Access to Document

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