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The impact of bank credit on employment formality in Uruguay

Author

Listed:
  • Nestor Gandelman

    (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía)

  • Alejandro Rasteletti

    (Inter American Development Bank)

Abstract

This paper examines the effect of bank credit on employment formalization in Uruguay. Using a differencein-differences methodology proposed by Catão, Pagés and Rosales (2011), the paper finds that financial deepening decreases informality, especially in more financially dependent sectors. The effect is additionally found to be larger for women and younger workers. Despite the severe economic crisis and a sharp contraction of bank credit experienced by the economy in the period of analysis, no evidence is found that the effect of bank credit on employment formality has changed over time.

Suggested Citation

  • Nestor Gandelman & Alejandro Rasteletti, 2012. "The impact of bank credit on employment formality in Uruguay," Documentos de Investigación 75, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    • Handle: RePEc:avs:wpaper:75
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    References listed on IDEAS

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    1. D'Erasmo, Pablo N. & Moscoso Boedo, Hernan J., 2012. "Financial structure, informality and development," Journal of Monetary Economics, Elsevier, vol. 59(3), pages 286-302.
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    16. Catão, Luis A. V. & Pagés, Carmen & Rosales, Maria Fernanda, 2009. "Financial Dependence, Formal Credit, and Informal Jobs: New Evidence from Brazilian Household Data," IZA Discussion Papers 4609, Institute for the Study of Labor (IZA).
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    Cited by:

    1. Francisco Fernández López, 2017. "Impacto de la informalidad laboral sobre el acceso a crédito formal," Coyuntura Económica, Fedesarrollo, vol. 47(1 y 2), pages 169-204, December.
    2. Nuhu, Peter & Bukari, Dramani & Sulemana, Yusif, 2023. "A decomposition analysis of the nexus between employment and credit in West Africa’s biggest economies," MPRA Paper 118345, University Library of Munich, Germany.
    3. Distinguin, Isabelle & Rugemintwari, Clovis & Tacneng, Ruth, 2016. "Can Informal Firms Hurt Registered SMEs’ Access to Credit?," World Development, Elsevier, vol. 84(C), pages 18-40.

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    More about this item

    Keywords

    credit market; informality; Uruguay;
    All these keywords.

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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