Can Paying Firms Quicker Affect Aggregate Employment?

Jean Barrot () and Ramana Nanda

Working Papers from eSocialSciences

Abstract: This paper studies the impact of reform on county-sector employment growth over three years. Despite firms being paid just 15 days sooner, we find payroll increased 10 cents for each accelerated dollar, with two-thirds of the effect coming from an increase in new hires and the balance from an increase in earnings. The result of this study highlights an important channel through which financing constraints can be alleviated for small firms, and emphasizes the general-equilibrium effects of large-scale interventions, which can lead to a substantially lower net impact on aggregate outcomes. [Working Paper 22420]

Keywords: Employment; payroll; large-scale interventions (search for similar items in EconPapers)
Date: 2016-07
Note: Institutional Papers
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Citations: View citations in EconPapers (8)

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Working Paper: Can Paying Firms Quicker Affect Aggregate Employment? (2016)
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