Working Papers: 


Are export shocks transmitted between firms competing in the same labour market?  In particular, how does labour market competition affect firms and workers that are exposed to successful exporters? To answer these questions, we employ administrative linked employer-employee dataset covering the population of Danish firms and workers, a novel approach to define labour markets through clustered worker transitions between jobs, and an empirical strategy based on shocks to firm-level export stemming from variation in world import demand. Overall, we find evidence for positive spillover effects for both workers and firms indirectly exposed to positive export shocks through the labour market. Our analysis reveals two distinct and co-existing mechanisms underlying transmission of export shocks: a direct within-market competitive pressure, causing firms to increase wages and reallocation of workers towards firms experiencing an export boost, and a positive employment spillover for firms competing with growing exporters. Positive employment spillovers and competitive worker reallocations act in different directions. Which effect dominates depends on how permeable the boundaries of a given labour market are. In self-contained labour markets, firms mainly compete for a fixed pool of workers. This generates intense wage competition and reallocation of workers to firms that experience positive export shocks. Conversely, in markets where boundaries are loose, competitors' export shocks trigger the entry of new workers from other labour markets, improving vacancy filling rates and/or match quality.


This paper studies the long-lasting effect of a credit supply shock on firms economic activity and labour force composition. Using a novel matched bank-employer-employee dataset from Denmark covering 2000 to 2016, I exploit differences in bank exposure to the freeze of the international interbank market in 2009 to identify the effect of the sudden shock in credit supply on firms' adjustments. Firms connected to exposed banks reduced employment by 15 percent more relative to the control group. The employment reduction was caused by a sharp contraction in hiring and increased separation rate, and a general drop in revenues, driven by a 20 percent drop in export. Results on the total turnover rate suggest that the relatively high separation rate  of firms linked to exposed bank was the main contribution towards the differential impact on employment. The contraction in economic activity co-moved with an increase in the average wage, driven by a shift towards a higher-skilled labour force. I find that firms that maintained high exports and employment level did so by eroding more liquid assets compared to downsizing companies, which retain a higher level of liquidity as precautionary savings. The effect of the credit crunch was long-lasting and altered firms' core throughout the whole post-2009 period. Contrary to much of the literature, I do not find evidence for a differential effect on investment rate. 


This paper proposes a model to study the joint effect of changes in availability to secured and unsecured credit to households on unemployment, where the two types of credit can potentially act as substitutes. Extending the Mortensen-Pissariden model, I develop a two-sector search and matching model of the labour market with inter-sectoral mobility of workers, a housing market and two frictional goods markets. Households face endogenous borrowing constraints to finance random consumption opportunities both with secured and unsecured credit. In general, financial innovations that increase the availability of both secured and unsecured credit positively affect firms revenues lowering unemployment. However, if shocks are strong enough to trigger reallocation of workers across sectors, complex dynamics emerge and shocks to one credit market, i.e. secured credit, can adversely affect the price and availability of unsecured credit and vice versa. To quantify the impact of credit frictions on the fluctuations of the labour market, I calibrate the model using detailed data on debt decomposition from the Survey of Consumer Finance and time-series data on the use of extracted home equity. I find that the rise in home equity secured credit used to finance private consumption can only explain a small share of the fluctuations in employment between 2002-2010, while the sudden decrease in unsecured credit is an important determinant of the drop in employment that followed the Great Recession.


Published Policy papers:

Employment has increased significantly in Denmark, the euro area and the US during the post-pandemic expansion, with stronger growth relative to GDP than in previous expansions. The high job intensity of the recent expansion in the Danish economy has several causes, including sectoral shifts, hiring of less productive labour and increased use of labour in production. This development has been supported by the fact that demand has risen sharply, supply has increased, and wages have risen more slowly than product and input prices during the period. However, the pressure on the Danish labour market has eased over the past two years.

We have estimated a new measure of pension wealth gains, covering the working-age population in Denmark during 2015-2022, in collaboration with Statistics Denmark. By linking this new data to the existing income and tax registers at the individual level, we provide a full picture of net financial wealth gains across the age distribution. This lays out the basis for further analysis, e.g., of the impact of monetary policy on net capital gains in Danish households. The data can be accessed through Statistics Denmark’s research data portal.

We show that the cash holdings of a typical Danish company have increased after the 2007/08 financial crisis. Especially the cash holdings of small companies have seen a strong increase. The increase in cash holdings coincides with a decrease in the use of loan financing for the typical company, which suggests a decrease in loan demand or supply to these companies. The development of cash holdings is also driven by a strong selection effect: companies with low cash holdings have been especially likely to exit during and after the financial crisis.