Financing Labor | Zendy

Efraim Benmelech | Zendy; Nittai Bergman | Zendy; Amit Seru | Zendy

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Financing Labor

Author(s) -

Efraim Benmelech,

Nittai Bergman,

Amit Seru

Publication year - 2021

Publication title -

review of finance

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 4.933

H-Index - 61

eISSN - 1875-824X

pISSN - 1572-3097

DOI - 10.1093/rof/rfab013

Subject(s) - unemployment , market liquidity , finance , business , economics , trace (psycholinguistics) , labour economics , macroeconomics , linguistics , philosophy

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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