Template-Type: ReDIF-Paper 1.0
Title: The Long Run Earnings Effects of a Credit Market Disruption
Author-Name: Effrosyni Adamopoulou
Author-Email: adamopoulou@uni-mannheim.de
Author-Name: Marta De Philippis
Author-Email:
Author-Name: Enrico Sette
Author-Email:
Author-Name: Eliana Viviano
Author-Email:

Classification-JEL: E24, E44, G21, J21, J31, J63
Keywords: credit crunch, employment, wages, long run effects, administrative data, linked bank-employer-employee panel data

Abstract: 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.

Note: 
Length: 47
Creation-Date: 2020-04
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp169
Handle: RePEc:bon:boncrc:CRCTR224_2020_169v3