TY  - JOUR
AU  - Benmelech,Efraim
AU  - Bergman,Nittai K.
AU  - Seru,Amit
TI  - Financing Labor
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17144
PY  - 2011
Y2  - June 2011
UR  - http://www.nber.org/papers/w17144
L1  - http://www.nber.org/papers/w17144.pdf
N1  - Author contact info:
Efraim Benmelech
Kellogg School of Management
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-4462
Fax: 847/491-5719
E-Mail: e-benmelech@kellogg.northwestern.edu

Nittai Bergman
MIT Sloan School of Management
100 Main Street, E62-632
Cambridge, MA 02142
Tel: 617/253-2933
Fax: 617/258-6855
E-Mail: nbergman@mit.edu

Amit Seru
Booth School of Business
University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/834-2767
E-Mail: amit.seru@chicagobooth.edu
AB  - Financial market imperfections can have significant impact on employment decisions of firms. We illustrate the economic importance of this channel by demonstrating that the responsiveness of employment decisions to firms’ financial health is quantitatively similar to the much-studied responsiveness of investment decisions to cash-flows. We use a collage of three ‘quasi-experiments’ used previously in the investment-cash flow and finance-growth literatures to trace the effects of finance on employment. Our results suggest that financial constraints and the availability of credit play an important role in firm-level employment decisions, as well as aggregate unemployment outcomes
ER  -