Credit Supply, Firms, and Earnings Inequality

Christian Moser, Farzad Saidi (), Benjamin Wirth () and Stefanie Wolter ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

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.

Keywords: Wages; Employment; Worker and Firm Heterogeneity; Credit Supply; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E24 E51 J23 J31 (search for similar items in EconPapers)
Pages: 43
Date: 2024-06
New Economics Papers: this item is included in nep-ban, nep-cba, nep-eec, nep-fdg, nep-lma and nep-mon
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Related works:
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:bon:boncrc:crctr224_2024_558

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