Real effects of relaxing financial constraints for homeowners: Evidence from Danish firms

Arbeitspapier

We study how a reduction in financial constraints faced by homeowners affects consumption, and in turn employment creation and the skill composition of the workforce over the business cycle. We leverage a wide set of Danish administrative registries, and implement a difference-in-differences strategy based on the introduction of a new mortgage product in 2003 to estimate the causal effect of a relaxation of homeowners' borrowing constraints on consumer expenditure. The estimated exogenous shift in consumption, which varies across municipalities and over time, is a strong predictor of the growth in employment for local establishments. However, the positions created due to a credit-induced demand shock differ from pre-trends: they require lower skill levels and are filled by younger, less experienced and less educated workers. These workers, particularly those filling low-skilled positions between 2004 and 2007, face earlier separations and a higher degree of unemployment ex-post.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Danmarks Nationalbank Working Papers ; No. 139

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Business Fluctuations; Cycles ; Firm Behavior: Empirical Analysis ; Labor Force and Employment, Size, and Structure
• Thema: Mortgages ; consumption ; employment

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): De Stefani, Alessia ; Moertel, Julia
• Ereignis: Veröffentlichung
• (wer): Danmarks Nationalbank
• (wo): Copenhagen
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/202879
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ