Financing constraints and unemployment: Evidence from the Great Recession

Burcu Duygan-Bump, Alexey Levkov and Judit Montoriol-Garriga
Authors registered in the RePEc Author Service: Judit Montoriol Garriga ()

Journal of Monetary Economics, 2015, vol. 75, issue C, 89-105

Abstract: This paper shows that financing constraints of small firms were one of the drivers of unemployment dynamics during the 2007–2009 recession in the United States. Specifically, workers in small firms were more likely to become unemployed during the 2007–2009 recession than comparable workers in large firms, but only if they were employed in industries with high financing needs. We find very similar results for the 1990–1991 recession, but not for the 2001 recession, where only the former was associated with a reduction in loan supply. The findings support the credit constraints hypothesis and underscore the role of bank lending in explaining labor market activity.

Keywords: Great Recession; Firm size; Financial dependence; Unemployment (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (152)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393215000033
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Financing Constraints and Unemployment: Evidence from the Great Recession (2014)
Working Paper: Financing constraints and unemployment: evidence from the Great Recession (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:75:y:2015:i:c:p:89-105

DOI: 10.1016/j.jmoneco.2014.12.011

Access Statistics for this article

Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser

More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().