Do financial constraints affect the composition of workers of a firm?

Main Article Content

Robert Breunig https://orcid.org/0000-0002-2220-3410
Diana `Hourani
Sasan Bakhtiari
Elisabetta Magnani https://orcid.org/0000-0002-8858-0737

Keywords

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

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 constraints 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.


JEL Codes: D22, L23, J29, J49

Abstract 79 | PDF Downloads 61

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