Credit Supply, Firms, and Earnings Inequality
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.
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Copy CitationChristian Moser, Farzad Saidi, Benjamin Wirth, and Stefanie Wolter, "Credit Supply, Firms, and Earnings Inequality," NBER Working Paper 35224 (2026), https://doi.org/10.3386/w35224.Download Citation
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