Arbeitspapier
Employee costs of corporate bankruptcy
An employee's annual earnings fall by 13% the year her firm files for bankruptcy, and the present value of lost earnings from bankruptcy to six years following bankruptcy is 87% of pre-bankruptcy annual earnings. More worker earnings are lost in thin labor markets and among small firms. Ex ante compensating wage differentials for this "bankruptcy risk" are approximately 2% of firm value for a firm whose credit rating falls from AA to BBB, comparable to the magnitude of debt tax benefits. Thus, wage premia for expected costs of bankruptcy are of sufficient magnitude to be an important consideration in corporate capital structure decisions.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. WP 2022-09
- Klassifikation
-
Wirtschaft
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Bankruptcy; Liquidation
Labor Force and Employment, Size, and Structure
Wage Level and Structure; Wage Differentials
Geographic Labor Mobility; Immigrant Workers
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Graham, John R.
Kim, Hyunseob
Li, Si
Qiu, Jiaping
- Ereignis
-
Veröffentlichung
- (wer)
-
Federal Reserve Bank of Chicago
- (wo)
-
Chicago, IL
- (wann)
-
2022
- DOI
-
doi:10.21033/wp-2022-09
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Graham, John R.
- Kim, Hyunseob
- Li, Si
- Qiu, Jiaping
- Federal Reserve Bank of Chicago
Entstanden
- 2022
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