Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200096
Authors: 
Setzer, Ralph
Stieglitz, Moritz
Year of Publication: 
2019
Series/Report no.: 
IWH Discussion Papers No. 15/2019
Abstract: 
We explore the interaction between labour market reforms and financial frictions. Our study combines a new cross-country reform database on labour market reforms with matched firm-bank data for nine euro area countries over the period 1999 to 2013. While we find that labour market reforms are overall effective in increasing employment, restricted access to bank credit can undo up to half of long-term employment gains at the firm-level. Entrepreneurs without sufficient access to credit cannot reap the full benefits of more flexible employment regulation.
Subjects: 
labour market reforms
bank stress
employment protection
unemployment insurance
JEL: 
G21
J21
J80
K31
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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