CREDIT CONSTRAINTS AND LABOR SUPPLY: EVIDENCE FROM BANK BRANCHING DEREGULATION

Abstract

This paper examines labor supply adjustment‐both at the intensive and extensive margins‐following financial market development. Specifically, we exploit the staggered passage of bank branching deregulation in the United State to study the impact of relaxing credit constraints on labor supply decisions. We find strong evidence that improvements in how credit markets function decrease weekly hours worked, and that the effect is most significant for the lower‐middle (marginal) income group. Furthermore, we observe heterogeneous responses across demo graphic groups (race and income). In contrast, we find little to no evidence that deregulation has a significant impact on the extensive margin of participation.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 22 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.