The long-term earnings' effects of a credit market disruption

Arbeitspapier

This paper studies the long-term consequences on firms and workers of the credit crunch triggered by the 2007-2008 global financial crisis. Relying on a unique matched bank-employer-employee administrative dataset, we construct a firm-specific credit supply shock and examine firms' and workers' outcomes for 11 years after the crisis. We find that highly-exposed firms shrink permanently and invest less; these effects are larger for high capital-intensive firms. The impact on workers' earnings is also long-lasting, especially for high skilled workers, who are more complementary to capital. Displaced workers reallocate mostly to low capital-intensive firms, experiencing persistent wage losses.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 23-048

Classification and Topics

• Classification: Wirtschaft ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Financial Markets and the Macroeconomy ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Labor Force and Employment, Size, and Structure ; Wage Level and Structure; Wage Differentials ; Labor Turnover; Vacancies; Layoffs
• Subject: credit crunch ; employment ; wages ; long term effects ; linked bank-employer-employee panel data ; capital-skill complementarity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Adamopoulou, Effrosyni ; De Philippis, Marta ; Sette, Enrico ; Viviano, Eliana
• Event: Veröffentlichung
• (who): ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
• (where): Mannheim
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/280988
• URN: urn:nbn:de:bsz:180-madoc-662750
• Last update: 10.03.2025, 11:42 AM CET