Corporate Financial Frictions and Employee Mental Health

Daniel Kárpáti, Luc Renneboog

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This paper argues that corporate financing frictions can have an adverse effect on employee mental health, an important determinant of employee productivity. To identify the causal effects of financing frictions, we exploit variation in firms’ need to refinance their long-term debt in 2008, a period when refinancing became more difficult due to the credit crunch. Using administrative microdata, we find that antidepressant use grows significantly more among employees of firms in higher need of debt refinancing. Most of this effect occurs at employees keeping their jobs, pointing to decreased perceptions of job security as a possible transmission channel.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages59
Publication statusPublished - 25 Jan 2021

Publication series

NameCentER Discussion Paper


  • Financial crisis
  • credit supply
  • mental health
  • job insecurity


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