Can Paying Firms More Quickly Affect Aggregate Employment?
Jean-Noel Barrot () and
Ramana Nanda ()
Additional contact information
Jean-Noel Barrot: Massachusetts Institute of Technology
No 17-004, Harvard Business School Working Papers from Harvard Business School
We study the impact of Quickpay, a federal reform that indefinitely accelerated payments to small business contractors of the U.S. government. Despite treated firms being paid just 15 days sooner, we find a strong direct effect of the reform on county-sector employment growth. Importantly, however, we also document substantial crowding out of non-treated firms' employment within local labor markets. While the overall net employment effect was positive, it was close to zero in tight labor markets ? where direct effects were weaker and crowding out stronger. Our results highlight an important channel for alleviating financing constraints in small firms, but also emphasize the general-equilibrium effects of large-scale interventions, which can lead to lower aggregate outcomes depending on labor market conditions.
Date: 2016-07, Revised 2017-01
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:17-004
Access Statistics for this paper
More papers in Harvard Business School Working Papers from Harvard Business School Contact information at EDIRC.
Series data maintained by Soebagio Notosoehardjo ().