Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/179339
Authors: 
Bodnár, Katalin
Viviano, Eliana
Fadejeva, Ludmila
Hoeberichts, Marco
Izquierdo Peinado, Mario
Jadeau, Christophe
Year of Publication: 
2018
Series/Report no.: 
ECB Working Paper 2124
Abstract: 
More than five years after the start of the Sovereign debt crisis in Europe, its impact on labour market outcomes is not clear. This paper aims to fill this gap. We use qualitative firm-level data for 24 European countries, collected within the Wage Dynamics Network (WDN) of the ESCB. We first derive a set of indices measuring difficulties in accessing the credit market for the period 2010-13. Second, we provide a description of the relationship between credit difficulties and changes in labour input both along the extensive and the intensive margins as well as on wages. We find strong and significant correlation between credit difficulties and adjustments along both the extensive and the intensive margin. In the presence of credit market difficulties, firms cut wages by reducing the variable part of wages. This evidence suggests that credit shocks can affect not only the real economy, but also nominal variables.
Subjects: 
credit difficulties
labour input adjustment
intensive margin
JEL: 
D53
E24
E44
G31
G32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3229-5
Document Type: 
Working Paper

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