Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments January 15, 2018 erstellt
Description:
I investigate influences of unemployment insurance benefits on the cost of bank loans by exploiting changes in state unemployment insurance laws as a source of variation in labor unemployment costs. The evidence shows that the cost of bank loans is significantly lower for firms headquartered in states with more generous unemployment insurance benefits. I also find that higher unemployment insurance benefits reduce the loan spreads particularly for labor intensive and unionized firms. Empirical results are robust to controlling for loan characteristics, macroeconomic conditions and borrower characteristics. Overall, results suggest that credit markets respond to workers' unemployment costs while approving and pricing loan contracts