We use a unique dataset to estimate the impact of a large credit supply shock on employment in Spain. We exploit marked … credit more than other banks. We compare employment changes from 2006 to 2010 at firms heavily indebted to weak banks before … the crisis and the rest. Our estimates imply that these firms suffered an additional employment drop between 3 and 13 …

, administrative matched employer-employee data. The distributional analysis is then conducted by transposing predicted employment … effects of actual output shocks to household-level microdata. A scenario in which labor demand adjustments occur at the …