Credit supply and human capital: evidence from bank pension liabilities

Luciana Barbosa, Andrada Bilan and Claire Célérier

No 2271, Working Paper Series from European Central Bank

Abstract: We identify the effects of exogenous credit constraints on firm ability to attract and retain skilled workers. To do so, we exploit a shock to the value of the pension obligations of Portuguese banks resulting from a change in accounting norms. Using bank-firm credit exposures that we match with a census of all Portuguese employees, we show that firms in a relationship with affected banks borrow less and reduce employment mostly of high-skilled workers. High-skilled workers are more likely to exit and less likely to join affected firms. Overall, credit market frictions might have long lasting effects on firm productivity and growth through firm accumulation of human capital. JEL Classification: G21, J21, J24

Keywords: credit frictions; employment; skills; wages (search for similar items in EconPapers)
Date: 2019-04
New Economics Papers: this item is included in nep-bec and nep-lma
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20192271

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