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The Effect of Financial Development on Unemployment in Emerging Market Countries

Isiaka Raifu and Joshua Afolabi

Global Journal of Emerging Market Economies, 2023, vol. 15, issue 3, 354-384

Abstract: This study examined the effect of financial development on unemployment in 19 emerging market countries, considering their age groups and gender dichotomy. The data covers the period from 1991–2019. Pooled Ordinary Least Square (OLS), Dynamic OLS, and quantile regression via moments were employed as the estimation methods. Robustness was tested with Fully Modified OLS and Canonical Cointegration Regression (CCR) estimation methods. Our results show that financial development has a conditional mean reducing effect on unemployment and a reducing effect on the distribution of unemployment. However, the reducing effect of financial development on the distribution of unemployment varies across the working-age population and youths. Thus, there is a need to formulate and implement a long-term financial policy to ensure economic growth and guarantee employment for the working-age population and the youths irrespective of gender.

Keywords: Financial development; unemployment rate; pooled OLS; panel quantile regression (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:emeeco:v:15:y:2023:i:3:p:354-384

DOI: 10.1177/09749101221116715

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