Debt Constraints and Employment

• 成果类型: Article
• 署名作者: Kehoe, Patrick J.; Midrigan, Virgiliu; Pastorino, Elena
• 署名单位: Stanford University; University of London; University College London; Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; New York University; Stanford University
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/701608
• 发表日期: 2019
• 页码: 1926-1991
• 关键词: labor-market; equilibrium unemployment; cyclical behavior; worker flows; wages rise; BUSINESS; mobility; liquidity; earnings; MODEL

摘要

During the Great Recession, US regions that experienced large declines in household debt also experienced large drops in consumption, employment, and wages. We develop a search and matching model in which tighter debt constraints raise the cost of investing in new job vacancies and so reduce job-finding rates and employment. On-the-job human capital accumulation is critical to generating sizable drops in employment: it increases the duration of the benefit flows from posting vacancies, thereby amplifying the employment drop from a credit tightening 10-fold relative to the standard model. Our model reproduces the salient cross-regional features of the US Great Recession.