Dear colleagues, The Department of Economics cordially invites you to the WU Economic Research Seminar on Wednesday, November 10th, with Brigitte Hochmuth (University of Vienna) on "Financial Constraints, Firm Age, and the Labor Market" Abstract: This paper shows that credit crunches cause labor market effects that are nonlinear over time and heterogeneous by firm age. During the Great Financial Crisis, a credit supply shock caused young firms to reduce employment significantly more than old firms, because the housing bust in 2006 led to a decline in young firms' housing collateral and restricted their ability to borrow. To understand the underlying mechanism, I propose a financial frictions model with an explicit firm age structure. A simultaneous credit crunch and a decline in young firms' net worth can reconcile the model with my empirical results. While old firms switch to equity financing, young firms depend on debt financing and cut labor demand. As young firms disproportionately account for aggregate job growth, my findings explain the sluggish labor market recovery after the Great Financial Crisis. A counterfactual experiment shows that absent the net worth shock, the U.S. unemployment rate would have been back to its pre-crisis level two years sooner. Date: Wednesday, November 10th Time: 4.30 to 6 pm (CET) Location: building D4, ground floor, room D4.0.039 The following COVID-19-related regulations apply to all events at the WU campus need to be fulfilled for attending the research seminar: 2.5G proof and controls * You should only attend classroom units if you are not ill. * To participate in presence units, you have to show a 2.5G certificate (PCR-Tested, Vaccinated, Convalescent) upon request. You can find details regarding certificates and their validity here<https://learn.wu.ac.at/open/distanzlehre/3gproof> * Please arrive on campus at least 30-45 minutes before the start of the course. To ensure that the checks can be carried out as quickly and smoothly as possible, please always bring your certificate with you on paper and have your photo ID ready as well. If necessary, please also follow the on-site guiding system. * Checks may take place in front of the building or at the beginning of the course and will be carried out by WU staff and WU security personnel. Compulsory attendance, WU check-in and contact tracing * Please use the WU check-in (checkin.wu.ac.a<http://checkin.wu.ac.a>t) at the beginning of each course unit and during exams and enter your seat number. You can find the number right on the coloured spot on the desk. Registering your attendance and documenting your seat number are the basis for (official) contact tracing; providing incorrect information can have unpleasant consequences (quarantine) for you. * In any case, please comply with the attendance regulations for the course, which were communicated in advance in the eVVZ. In case you do not fulfil the attendance obligation without a provable important reason for your absence(s) (i.e. events that you cannot directly influence), you cannot be assessed positively. * Currently, there is no obligation to wear a mouth-nose mask during courses and examinations. If you wish to wear an MNS voluntarily, you might have to take it off briefly for an identity check. With best regards, Harald Oberhofer --- Univ.-Prof. Dr. Harald Oberhofer Department of Economics WU Vienna University of Economics and Business Phone: +43/1/31336-4984 Fax: +43/1/31336-4984 Email: harald.oberhofer@wu.ac.at<mailto:harald.oberhofer@wu.ac.at> Webpage: https://www.wu.ac.at/ie/mitarbeiter/harald-oberhofer/ Austrian Institute of Economic Research (WIFO) Phone: +43/1/7982601-468 Fax: +43/1/7989386 Email: harald.oberhofer@wifo.ac.at<mailto:harald.oberhofer@wifo.ac.at> Webpage: http://www.wifo.ac.at/harald_oberhofer