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Credit Market Regulations Changes And Labor Market Decisions

Author

Listed:
  • Daniela del Boca

  • Annamaria Lusardi

Abstract

In this paper, we examine whether the imperfections in the credit market spill over to the labor market. We examine the case of a country that experienced a very high degree of imperfections in the financial markets, but underwent substantial changes in 1992 due to the liberalization brought by the European unification and other institutional changes. Italy is therefore a good laboratory to study the effects of the financial markets on the labor market. Examining the period 1989-1993, we find that labor market decisions are influenced by household debt commitments, and, in particular, by constraints in the mortgage market.

Suggested Citation

  • Daniela del Boca & Annamaria Lusardi, 2001. "Credit Market Regulations Changes And Labor Market Decisions," CHILD Working Papers wp22_01, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    • Handle: RePEc:wpc:wplist:wp22_01
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    File URL: http://www.child.carloalberto.org/images/wp/child22_2001.pdf
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    References listed on IDEAS

    as
    1. Dau-Schmidt, K., 1992. "An Empirical Study of the Effect of Liquidity and Consumption Commitment Contraints on Intertemporal Labor Supply," Papers 92-012, Indiana - Center for Econometric Model Research.
    2. Guiso, Luigi & Jappelli, Tullio, 1991. "Intergenerational transfers and capital market imperfections : Evidence from a cross-section of Italian households," European Economic Review, Elsevier, vol. 35(1), pages 103-120, January.
    3. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
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    Cited by:

    1. Joydeep Bhattacharya & Shankha Chakraborty, 2005. "What do information frictions do?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(3), pages 651-675, October.
    2. Renata Bottazzi, 2004. "Labour market participation and mortgage related borrowing constraints," IFS Working Papers W04/09, Institute for Fiscal Studies.

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    Keywords

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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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