Credit Market Constraints and Labor Market Decisions

Del Boca, Daniela; Lusardi, Annamaria

Credit Market Constraints and Labor Market Decisions

43 Pages Posted: 21 Oct 2002

Daniela Del Boca

University of Turin - Department of Economics; IZA Institute of Labor Economics; Centre for Household, Income, Labour and Demographic Economics (CHILD)

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Date Written: October 2002

Abstract

In this paper, we examine whether imperfections in credit markets spill over to other markets, particularly the labor market. We take the case of Italy, a country that experienced changes in the mortgage market brought about by the 1992 European unification and other institutional shifts. These events make Italy a good laboratory to study the effects of financial markets on the labor market. Using a simultaneous equation framework and household data from the Bank of Italy between 1989 and 1993, we estimate the relationship between female participation and mortgage use. We find a significant impact of mortgages on women's participation in the labor market.

Keywords: Mortgage Market, Female Labor Market Participation

JEL Classification: J2, D91

Suggested Citation: Suggested Citation

Del Boca, Daniela and Lusardi, Annamaria, Credit Market Constraints and Labor Market Decisions (October 2002). IZA Discussion Paper No. 598. Available at SSRN: https://ssrn.com/abstract=341542