Bankruptcy Shocks and Legal Labor Markets: Evidence from the Court Competition Era
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arXiv
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| Main Authors: | , , |
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| Format: | Preprint |
| Published: |
2022
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| _version_ | 1866917754611695616 |
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| author | Brown, Chad Carballo, Jeronimo Peri, Alessandro |
| author_facet | Brown, Chad Carballo, Jeronimo Peri, Alessandro |
| contents | We study how Chapter 11 bankruptcies affect local legal labor markets. We document that bankruptcy shocks increase county legal employment and corroborate this finding by exploiting a stipulation of the law known as Forum Shopping during the Court Competition Era (1991-1996). We quantify losses to local communities from firms forum shopping away from their local area as follows. First, we calculate the unrealized potential employment gains implied by our reduced-form results. Second, we structurally estimate a model of legal labor markets and quantify welfare losses. We uncover meaningful costs to local communities from lax bankruptcy venue laws. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2202_00044 |
| institution | arXiv |
| publishDate | 2022 |
| record_format | arxiv |
| spellingShingle | Bankruptcy Shocks and Legal Labor Markets: Evidence from the Court Competition Era Brown, Chad Carballo, Jeronimo Peri, Alessandro General Economics Economics We study how Chapter 11 bankruptcies affect local legal labor markets. We document that bankruptcy shocks increase county legal employment and corroborate this finding by exploiting a stipulation of the law known as Forum Shopping during the Court Competition Era (1991-1996). We quantify losses to local communities from firms forum shopping away from their local area as follows. First, we calculate the unrealized potential employment gains implied by our reduced-form results. Second, we structurally estimate a model of legal labor markets and quantify welfare losses. We uncover meaningful costs to local communities from lax bankruptcy venue laws. |
| title | Bankruptcy Shocks and Legal Labor Markets: Evidence from the Court Competition Era |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2202.00044 |