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Financing Labor

Authors :
Efraim Benmelech
Nittai Bergman
Amit Seru
Publication Year :
2011

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

Details

Database :
OpenAIRE
Accession number :
edsair.doi.dedup.....a10b66eda96caeb1b1c6fd4b85cf897e