Credit Supply, Firms, and Earnings Inequality

Christian Moser, Farzad Saidi (), Benjamin Wirth () and Stefanie Wolter ()
Additional contact information
Farzad Saidi: University of Bonn
Benjamin Wirth: avarian State Office for Statistics
Stefanie Wolter: Institute for Employment Research, IAB

No 18633, IZA Discussion Papers from IZA Network @ LISER

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. 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 wages and employment both within and between firms.

Keywords: wages; employment; distribution; credit supply; monetary policy; downward wage rigidity (search for similar items in EconPapers)
JEL-codes: E24 E51 J23 J31 (search for similar items in EconPapers)
Date: 2026-05
New Economics Papers: this item is included in nep-lma
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Related works:
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2026)
Working Paper: Credit Supply, Firms, and Earnings Inequality (2024)
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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