The Impact of Financial Access on Gender Unemployment: Panel Data Evidence from in 51 developed and developing countries

Abstract

Unemployment is a frequently debated issue, and the issue has become more pressing since studies have indicated that females and males are encountering degrees of unemployment. This study investigates the influence of financial access on unemployment between females and males. Data from 51 developed and developing countries from 2004 to 2016 is analysed by deploying the dynamic panel system generalized method of moments estimators. This paper contributes to the literature by utilising the number of bank branches and automated teller machines to proxy financial access indicators. The availability of the papers that examine these indicators is limited. Besides, this study is novel because no attempt has been made to compare the effect of financial access on female and male unemployment using a panel dataset. The results showed that financial access indicators positively associate with female and male unemployment, probably due to the detrimental effect of financing on job creation. In addition, the positive relationship between employment and financial access is more significant for male unemployment than female unemployment, which might relate to the argument that males are more exposed to formal financial services. Furthermore, bank branches have a more noticeable impact and stronger influence than automated teller machines in affecting female and male unemployment rates. This paper suggests that governments need to improve the financial system to create the positive impacts of financial access on employment and reduce negative shocks to the economy via formal financial institutions. Lastly, alternative financial channels, such as microfinance, could be promoted as an alternative to formal financial institutions.