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Effects of US Banking Deregulation on Unemployment Dynamics

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Abstract

I use state-level banking deregulation in the U.S. to study the causal impact of credit expansion on unemployment through their effects on the average monthly job-finding and job-losing rates. State-level analysis shows that deregulation increased the average job-finding rate and decreased the job-losing rate, and thus led to a lower unemployment rate. Extending the analysis to industry-state level, I find that banking deregulation increased the job-finding rate similarly across industries, but they decreased job-losing rate only in industries with high external finance dependence.

Suggested Citation

  • Bulent Unel, 2019. "Effects of US Banking Deregulation on Unemployment Dynamics," Departmental Working Papers 2019-04, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2019-04
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    File URL: https://www.lsu.edu/business/economics/files/workingpapers/pap19_04.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Yang Ming & Heng-fu Zou, 2024. "The Spirit of Capitalism, Entrepreneurship, and Talent Allocation," Annals of Economics and Finance, Society for AEF, vol. 25(1), pages 1-29, May.
    3. Liu, Tie-Ying & Lin, Ye, 2023. "Does global warming affect unemployment? International evidence," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 991-1005.
    4. Ma, Jiantao & Sarker, Anindo & Unel, Bulent, 2025. "Does credit expansion encourage small businesses to incorporate? Evidence from US bank deregulations," Journal of Economic Behavior & Organization, Elsevier, vol. 230(C).

    More about this item

    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
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • 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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