IDEAS home Printed from https://ideas.repec.org/a/pal/imfecr/v61y2013i4p631-663.html
   My bibliography  Save this article

Financial Shocks and Labor: Facts and Theories

Author

Listed:
  • Tito Boeri
  • Pietro Garibaldi
  • Espen R Moen

Abstract

The global financial recession of 2008–9 as well as historical precedents with financial crises suggest that financial shocks do translate into the labor markets. This paper first documents that financial recessions are different from other recessions in terms of their labor market impact, as they involve a larger employment/unemployment response conditioning on output. Second, it surveys the various mechanisms linking financial shocks to employment adjustment, developing a new theory of the effects of leverage on job creation and destruction. Third, it presents evidence coherent with one of such mechanisms, notably with the prediction that more leveraged firms experience larger job destruction during financial recessions, controlling for the scale of output falls.

Suggested Citation

  • Tito Boeri & Pietro Garibaldi & Espen R Moen, 2013. "Financial Shocks and Labor: Facts and Theories," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(4), pages 631-663, December.
    • Handle: RePEc:pal:imfecr:v:61:y:2013:i:4:p:631-663
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/imfer/journal/v61/n4/pdf/imfer201320a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/imfer/journal/v61/n4/full/imfer201320a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:imfecr:v:61:y:2013:i:4:p:631-663. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.