Template-Type: ReDIF-Paper 1.0
Title: Credit Supply, Firms, and Earnings Inequality
Author-Name: Christian Moser
Author-Email: c.moser@columbia.edu
Author-Name: Farzad Saidi
Author-Email: saidi@uni-bonn.de
Author-Name: Benjamin Wirth
Author-Email: benjamin.wirth@statistik.bayern.de
Author-Name: Stefanie Wolter
Author-Email: stefanie.wolter@iab.de

Classification-JEL: J31, E24, J23, E51
Keywords: Wages, Employment, Worker and Firm Heterogeneity, Credit Supply, Monetary Policy

Abstract: We study the distributional consequences of monetary policy-induced credit supply in the
German labor market. Firms in relationships with banks that are more exposed to the introduction
of negative interest rates in 2014 experience a relative contraction in credit supply, associated
with lower average wages and employment. Within firms, initially lower-paid workers
are more likely to leave employment, while initially higher-paid workers see a relative decline
in wages. Between firms, wages fall by more at initially higher-paying employers. Our results
suggest that credit affects the distribution of pay and employment both within and between
firms.

Note: 
Length: 43
Creation-Date: 2024-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp558
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2024_558