| Popis: |
This paper investigates how differences in the unemployment insurance scheme across US states influence firms’ financial metrics. I find that, over the 1981-2016 period, higher unemployment insurance benefits are associated with lower financial leverage through a crowding-out effect. In states with more generous UI benefits, creditors are willing to offer more favourable loan conditions, which translates into longer debt maturity and lower interest, increasing the interest coverage ratio. Simultaneously, increasing UI benefits originates moral hazard problems among employees, decreasing their productivity levels. No statistically significant relationship was found between unemployment insurance generosity and an increase in credit ratings. |
