{"title":"Occupational choice, human capital and financial constraints","authors":"Rui Castro, Pavel Ševčík","doi":"10.1111/caje.12721","DOIUrl":null,"url":null,"abstract":"<p>We study the aggregate productivity effects of firm-level financial frictions. Credit constraints affect not only production decisions but also household-level schooling decisions. In turn, entrepreneurial schooling decisions impact firm-level productivities, whose cross-sectional distribution becomes endogenous. In anticipation of future constraints, entrepreneurs underinvest in schooling early in life. Frictions lower aggregate productivity because talent is misallocated across occupations and capital is misallocated across firms. Firm-level productivities are also lower due to schooling distortions. These effects combined account for between 36% and 68% of the US–India aggregate productivity difference. Schooling distortions are the major source of aggregate productivity differences.</p>","PeriodicalId":47941,"journal":{"name":"Canadian Journal of Economics-Revue Canadienne D Economique","volume":"57 3","pages":"674-703"},"PeriodicalIF":1.3000,"publicationDate":"2024-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/caje.12721","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Canadian Journal of Economics-Revue Canadienne D Economique","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/caje.12721","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We study the aggregate productivity effects of firm-level financial frictions. Credit constraints affect not only production decisions but also household-level schooling decisions. In turn, entrepreneurial schooling decisions impact firm-level productivities, whose cross-sectional distribution becomes endogenous. In anticipation of future constraints, entrepreneurs underinvest in schooling early in life. Frictions lower aggregate productivity because talent is misallocated across occupations and capital is misallocated across firms. Firm-level productivities are also lower due to schooling distortions. These effects combined account for between 36% and 68% of the US–India aggregate productivity difference. Schooling distortions are the major source of aggregate productivity differences.
期刊介绍：
The Canadian Journal of Economics (CJE) is the journal of the Canadian Economics Association (CEA) and is the primary academic economics journal based in Canada. The editors seek to maintain and enhance the position of the CJE as a major, internationally recognized journal and are very receptive to high-quality papers on any economics topic from any source. In addition, the editors recognize the Journal"s role as an important outlet for high-quality empirical papers about the Canadian economy and about Canadian policy issues.
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