Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30652
Authors: 
Gatti, Donatella
Rault, Christophe
Vaubourg, Anne-Gaël
Year of Publication: 
2009
Series/Report no.: 
CESifo Working Paper 2901
Abstract: 
Using annual data for 18 OECD countries over the period 1980-2004, we investigate how labour and financial factors interact to determine unemployment by estimating a dynamic panel model using the system generalized method of moments (GMM). We show that the impact of financial variables depends strongly on the labour market context. Increased market capitalization as well as decreased banking concentration reduce unemployment if the level of labour market regulation, union density and coordination in wage bargaining is low. The above financial variables have no effect otherwise. Increasing intermediated credit and banking concentration is beneficial for employment when the degree of labour market regulation, union density and coordination in wage bargaining is high. These results suggest that the respective virtues of ed and market-based finance are crucially tied to the labour market context.
Subjects: 
unemployment
institutional complementarities and substituabilities
labour market
financial system
JEL: 
E24
J23
P17
Document Type: 
Working Paper

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