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Credit Supply, Firms, and Earnings Inequality

Author

Listed:
  • Christian Moser
  • Farzad Saidi
  • Benjamin Wirth
  • Stefanie Wolter

Abstract

We study the distributional consequences of monetary policy-induced credit supply in the German labor market. Firms in relationships with banks that are more exposed to the introduction of negative interest rates in 2014 experience a relative contraction in credit supply, associated with lower average wages. Within firms, initially lower-paid workers are more likely to leave employment, while initially higher-paid workers see a relative decline in wages. Between firms, wages fall by more at initially higher-paying employers. Our results suggest that credit affects the distribution of wages and employment both within and between firms.

Suggested Citation

  • Christian Moser & Farzad Saidi & Benjamin Wirth & Stefanie Wolter, 2026. "Credit Supply, Firms, and Earnings Inequality," NBER Working Papers 35224, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:35224
    Note: EFG LS ME
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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