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Banking deregulation around the world, 1970s to 2000s: The impact on unemployment

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  • Feldmann, Horst

Abstract

Using data on 53 countries, this paper studies the unemployment effects of the far-reaching banking liberalization that many countries engaged in between the late 1970s and the early 2000s. According to the regression results, this liberalization substantially decreased unemployment, particularly among young people. The lowering of barriers to the entry of foreign banks, new domestic banks and non-bank financial intermediaries, and the reduction in state ownership, had the strongest effects. There is some, albeit weak, evidence that the cutback in interest rate controls has decreased unemployment as well. The results are robust to both endogeneity and numerous variations in specification.

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  • Feldmann, Horst, 2012. "Banking deregulation around the world, 1970s to 2000s: The impact on unemployment," International Review of Economics & Finance, Elsevier, vol. 24(C), pages 26-42.
  • Handle: RePEc:eee:reveco:v:24:y:2012:i:c:p:26-42
    DOI: 10.1016/j.iref.2012.01.003
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    Cited by:

    1. Owen, Ann L. & Temesvary, Judit, 2014. "Heterogeneity in the growth and finance relationship: How does the impact of bank finance vary by country and type of lending?," International Review of Economics & Finance, Elsevier, vol. 31(C), pages 275-288.
    2. Horst Feldmann, 2012. "Product Market Regulation and Labor Market Performance around the World," LABOUR, CEIS, vol. 26(3), pages 369-391, September.
    3. Feldmann, Horst, 2015. "Banking system concentration and unemployment in developing countries," Journal of Economics and Business, Elsevier, vol. 77(C), pages 60-78.
    4. Saona, Paolo, 2016. "Intra- and extra-bank determinants of Latin American Banks' profitability," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 197-214.

    More about this item

    Keywords

    Banking regulation; Labor market; Unemployment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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