Credit Supply and Human Capital: Evidence from Bank Pension Liabilities

64 Pages Posted: 25 Apr 2019

See all articles by Luciana Barbosa

Luciana Barbosa

Bank of Portugal - Economic Research Department

Andrada Bilan

Swiss Finance Institute; University of Zurich

Claire Célérier

University of Toronto

Multiple version iconThere are 2 versions of this paper

Date Written: April 23, 2019

Abstract

We identify the effects of exogenous credit constraints on firm ability to attract and retain skilled workers. To do so, we exploit a shock to the value of the pension obligations of Portuguese banks resulting from a change in accounting norms. Using bank-firm credit exposures that we match with a census of all Portuguese employees, we show that firms in a relationship with affected banks borrow less and reduce employment mostly of high-skilled workers. High-skilled workers are more likely to exit and less likely to join affected firms. Overall, credit market frictions might have long lasting effects on firm productivity and growth through firm accumulation of human capital.

Keywords: credit frictions, employment, skills, wages

JEL Classification: G21, J21, J24

Suggested Citation

Barbosa, Luciana and Bilan, Andrada and Célérier, Claire, Credit Supply and Human Capital: Evidence from Bank Pension Liabilities (April 23, 2019). ECB Working Paper No. 2271 (2019); ISBN 978-92-899-3533-3 . Available at SSRN: https://ssrn.com/abstract=3377145

Luciana Barbosa (Contact Author)

Bank of Portugal - Economic Research Department ( email )

R. do Ouro, 27
Lisboa, 1100-150
Portugal

Andrada Bilan

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Claire Célérier

University of Toronto ( email )

Toronto, M5S 3G8
Canada

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