When Credit Dries Up: Job Losses in the Great Recession

Samuel Bentolila, Marcel Jansen, Gabriel Jimenez and Sonia Ruano ()
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Sonia Ruano: Bank of Spain

No 7807, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We use a unique dataset to estimate the impact of a large credit supply shock on employment in Spain. We exploit marked differences in banks' health at the onset of the Great Recession. Several weak banks were rescued by the State and they reduced credit more than other banks. We compare employment changes from 2006 to 2010 at firms heavily indebted to weak banks before the crisis and the rest. Our estimates imply that these firms suffered an additional employment drop between 3 and 13.5 percentage points due to weak-bank attachment, representing between 8% and 36% of aggregate job losses.

Keywords: job losses; Great Recession; credit constraints (search for similar items in EconPapers)
JEL-codes: D92 G33 J23 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2013-12
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Citations: View citations in EconPapers (56)

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Related works:
Journal Article: When Credit Dries Up: Job Losses in the Great Recession (2018)
Working Paper: When Credit Dries Up: Job Losses in the Great Recession (2013)
Working Paper: When Credit Dries up: Job Losses in the Great Recession (2013)
Working Paper: When Credit Dries Up: Job Losses in the Great Recession (2013)
Working Paper: When Credit Dries Up: Job Losses in the Great Recession (2013)
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