Liquidity Constraints and Occupational Choice

16 Pages Posted: 29 Jan 2009 Last revised: 27 Jun 2010

See all articles by Mariassunta Giannetti

Mariassunta Giannetti

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: June 26, 2010

Abstract

I show that liquidity constraints are related to individuals’ occupational choice. A proxy for the prospect of becoming liquidity constrained affects negatively the probability of being self-employed as opposed to being employed in the private or the public sectors. Furthermore, individuals with higher probability of facing liquidity constraints are more likely to be employed in the public sector, which offers the highest level of job and income security, instead of being employed in the private sector.

Keywords: Occupational choice, sorting in labor markets, liquidity constraints

JEL Classification: J2, G1

Suggested Citation

Giannetti, Mariassunta, Liquidity Constraints and Occupational Choice (June 26, 2010). Available at SSRN: https://ssrn.com/abstract=1334108 or http://dx.doi.org/10.2139/ssrn.1334108

Mariassunta Giannetti (Contact Author)

Stockholm School of Economics ( email )

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HOME PAGE: http://sites.google.com/site/mariassuntagiannetti/Home

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Swedish House of Finance ( email )

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111 60 Stockholm
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