The Impact of Bank Credit on Employment Formality in Uruguay

28 Pages Posted: 9 Jun 2012

See all articles by Nestor Gandelman

Nestor Gandelman

Universidad ORT Uruguay

Alejandro Rasteletti

Inter-American Development Bank (IDB)

Date Written: April 2012

Abstract

This paper examines the effect of bank credit on employment formalization in Uruguay. Using a difference-in-differences methodology proposed by Cata~o, Page´s 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.

JEL Classification: E26, G21, O16, O4

Suggested Citation

Gandelman, Nestor and Rasteletti, Alejandro, The Impact of Bank Credit on Employment Formality in Uruguay (April 2012). IDB Working Paper No. IDB-WP-302, Available at SSRN: https://ssrn.com/abstract=2080391 or http://dx.doi.org/10.2139/ssrn.2080391

Nestor Gandelman

Universidad ORT Uruguay ( email )

Bulevar España 2633
Montevideo, 11.300
Uruguay

Alejandro Rasteletti

Inter-American Development Bank (IDB)

1300 New York Avenue NW
Washington, DC 20577
United States

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