Credit Market Constraints and Labor Market Decisions
43 Pages Posted: 21 Oct 2002
Date Written: October 2002
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