Economics at your fingertips  

Financial development and employment: New panel evidence

Rym Ayadi, Sami Ben Naceur () and Mohamed Goaied

Economic Notes, 2021, vol. 50, issue 2

Abstract: This paper adds to the recent literature on finance and employment creation by exploring the effect of finance on the labour market, using data on 143 countries from 1995 to 2015. We also examine whether the impact of financial development on labour is significantly different before and after the 2008 global financial crisis. This paper has five main findings. First, the analysis confirms the positive relationship between financial institution efficiency and access, as well as the employment rate in the linear specification. Second, the marginal returns to employment from further financial institution inclusion diminish at high levels of inclusion and turn negative when an inclusion point is reached. Third, the effects of financial market access on employment show a “U‐Shaped” relationship. Fourth, the positive effect of financial development on employment strengthens with the country's institutional quality. And fifth, there is strong support for a negative impact of financial development on employment during the global financial crisis of 2007–2008.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0391-5026

Access Statistics for this article

More articles in Economic Notes from Banca Monte dei Paschi di Siena SpA
Bibliographic data for series maintained by Wiley Content Delivery ().

Page updated 2023-01-03
Handle: RePEc:bla:ecnote:v:50:y:2021:i:2:n:e12185