Monetary Policy, Labor Income Redistribution and the Credit Channel: Evidence from Matched Employer-Employee and Credit Registers
Jose-Luis Peydro and
No 1338, Working Papers from Barcelona School of Economics
We document the heterogeneous effects of monetary policy on labor market outcomes via credit channel. Using employee-employer and credit registers in Portugal, we show that falling rates increase wages, hours worked and employment more in financially constrained small and young firms. Consistent with the capital-skill complementarity mechanism, we document an increase in the skill premium and show that financially constrained firms increase both physical and human capital investment the most. We uncover a central role of the credit channel with stronger state-dependent effects during crises. The effects are fully driven by firms with bank credit.
Keywords: monetary policy; labor income inequality; firm balance sheet channel; bank lending channel; capital-skill complementarity (search for similar items in EconPapers)
JEL-codes: D22 D31 E52 G01 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-mon
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Working Paper: Monetary policy, labor income redistribution and the credit channel: Evidence from matched employer-employee and credit registers (2023)
Working Paper: Monetary Policy, Labor Income Redistribution and the Credit Channel: Evidence from Matched Employer-Employee and Credit Registe (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1338
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