Do Financial Constraints Affect the Composition of Workers in a Firm?

26 Pages Posted: 24 Feb 2020

See all articles by Robert V. Breunig

Robert V. Breunig

Australian National University (ANU) - Crawford School of Public Policy

Diana Hourani

affiliation not provided to SSRN

Sasan Bakhtiari

Government of the Commonwealth of Australia - Department of Industry, Innovation and Science; Crawford School, ANU

Lisa Magnani

Macquarie University, Macquarie Business School

Abstract

We study the relationship between financing constraints and the workforce composition of firms that employ both casual and non-casual workers. We use data on Australian firms from 2009-2014 and a more direct measure of firm financial constraint than previous studies. We show that the proportion of casual workers in firms grew over the time period being analysed. This was the case regardless of whether a firm was financially constrained or not. However, the magnitude of this change differed between financially constrained and unconstrained firms. We find that of firms whose workforces were growing, financially constrained firms hired relatively fewer casual workers than financially unconstrained firms did. This is consistent with firms using internal financing to cope with a lack of access to credit and equity.

Keywords: financial constraints, firm behaviour, employment patterns, casual work, Australia

JEL Classification: D22, L23, J29, J49

Suggested Citation

Breunig, Robert V. and Hourani, Diana and Bakhtiari, Sasan and Magnani, Lisa, Do Financial Constraints Affect the Composition of Workers in a Firm?. IZA Discussion Paper No. 12970, Available at SSRN: https://ssrn.com/abstract=3542639

Robert V. Breunig (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia
61261252148 (Phone)

HOME PAGE: http://https://crawford.anu.edu.au/crawford_people/content/staff/rbreunig.php

Diana Hourani

affiliation not provided to SSRN

No Address Available

Sasan Bakhtiari

Government of the Commonwealth of Australia - Department of Industry, Innovation and Science ( email )

Sydney
Australia

Crawford School, ANU ( email )

7 Liversidge Street
Lennox Crossing
Canberra, ACT 0200
Australia

HOME PAGE: http://sites.google.com/site/sasanbakhtiari

Lisa Magnani

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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