The Impact of Bank Credit on Employment Formality in Uruguay
This paper examines the effect of bank credit on employment formalization in Uruguay. Using a difference-in-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 greater 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.
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| Format: | Working Papers biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Financial Sector, Informal Economy, Informal Labor, Credit Access, E26 - Informal Economy • Underground Economy, G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages, O16 - Financial Markets • Saving and Capital Investment • Corporate Finance and Governance O4 - Economic Growth and Aggregate Productivity, Credit market, |
| Online Access: | http://dx.doi.org/10.18235/0011379 https://publications.iadb.org/en/impact-bank-credit-employment-formality-uruguay |
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| Summary: | This paper examines the effect of bank credit on employment formalization in Uruguay. Using a difference-in-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 greater 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. |
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