Financial system sophistication and unemployment around the world

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Using data on 78 countries from 1984 to 2008 and a large number of controls, this article studies the unemployment effect of a major characteristic of the financial system: its level of sophistication, i.e. the variety of financial institutions and instruments available to the economy. It finds that a higher level of sophistication is likely to reduce unemployment. The magnitude of the estimated effect is moderate but noticeable.
Original languageEnglish
Pages (from-to)1491-1496
Number of pages6
JournalApplied Economics Letters
Issue number16
Publication statusPublished - 2013

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