Credit Supply, Firms, and Earnings Inequality

Christian Moser, Farzad Saidi, Benjamin Wirth and Stefanie Wolter

No 128, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

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. 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 wages and employment both within and between firms.

Keywords: Wages; Employment; Distribution; Credit supply; Monetary policy; Downward wage rigidity (search for similar items in EconPapers)
JEL-codes: E24 E51 J23 J31 (search for similar items in EconPapers)
Date: 2026-05-22
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Related works:
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2024)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2022)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2021)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:103290

DOI: 10.21034/iwp.128

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