Journal of Financial Stability· 2026Q1
Skilled labor mobility and bank default
- 2citations
- Q1SCImago
- 2026year
Short summary
Increased skilled labor mobility, particularly for risk officers, significantly raises bank default probability, a trend exacerbated by competition and net employee outflows.
AI-generated from the title and abstract; the full text is not read.
Key points
- A new bank-level measure of skilled labor mobility was developed using job-posting data.
- Higher skilled labor mobility is linked to a significant increase in bank default probability.
- The impact is driven by demand for risk officers, indicating reduced risk management capacity.
- Competition and net employee outflows amplify the effect on bank fragility.
- Legal restrictions on labor mobility can weaken the detrimental impact.
AI-generated from the title and abstract; the full text is not read.
Abstract
ABSTRACT This study investigates the impact of skilled labor mobility on bank fragility. We construct a novel bank-level measure of skilled labor mobility using job-posting data and show that it significantly increases bank default probability. The effect is driven entirely by demand for risk officers, identifying risk management capacity as the specific mechanism. The effect is amplified by competition and is concentrated among banks experiencing net employee outflows. We further document that legal restrictions on labor mobility weaken the potential detrimental effect. Our findings indicate that skilled labor mobility exacerbates bank fragility, yet targeted policies can bolster resilience against possible adverse effects from labor market frictions.
The authors' abstract, as published at the source. Journal of Financial Stability, 2026 · DOI ↗
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Field: Finance
FinanceEconomics, Econometrics and Finance