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FINANCIAL SYSTEM SOPHISTICATION AND UNEMPLOYMENT IN INDUSTRIAL COUNTRIES
Author(s) -
Feldmann Horst
Publication year - 2013
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.1466
Subject(s) - sophistication , unemployment , economics , labour economics , variety (cybernetics) , affect (linguistics) , macroeconomics , social science , sociology , linguistics , philosophy , artificial intelligence , computer science
By using data on 21 industrial countries from 1984 to 2006 and a large number of controls, this paper studies the unemployment effects of one major characteristic of the financial system: its level of sophistication, that is, the variety of financial institutions and instruments available to the economy. The paper finds that a higher level of sophistication is likely to reduce unemployment among the total labour force as well as among high‐skilled workers. The magnitude of both effects appears to be modest. By contrast, financial system sophistication does not appear to affect unemployment among low‐skilled workers. Copyright © 2012 John Wiley & Sons, Ltd.