IDEAS home Printed from https://ideas.repec.org/p/mia/wpaper/wp2022-02.html
   My bibliography  Save this paper

The Role of Skilled Labor in Income-based Government-directed Bank Lending

Author

Listed:
  • Indraneel Chakraborty

    (Department of Economics, University of Miami)

  • Vidhi Chhaochharia

    (Department of Economics, University of Miami)

  • Rong Hai

    (Department of Economics, University of Miami)

Abstract

We show that when governments direct banks to lend based on income, the outcomes differ by how closely capital matches the availability of skilled labor in the target population. We document that when skilled labor in the target area is high, additional credit is absorbed in small businesses and future welfare outlays are reduced. In contrast, if skilled labor is relatively low, then capital flows to mortgages and results in housing price growth. Our results point towards the importance of developing skilled labor, alongside credit-provision, for overall development of under-privileged communities.

Suggested Citation

  • Indraneel Chakraborty & Vidhi Chhaochharia & Rong Hai, 2022. "The Role of Skilled Labor in Income-based Government-directed Bank Lending," Working Papers wp2022-02, University of Miami, Department of Economics.
    • Handle: RePEc:mia:wpaper:wp2022-02
    as

    Download full text from publisher

    File URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4198471
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    bank lending; skilled labor;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mia:wpaper:wp2022-02. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Daniela Valdivia (email available below). General contact details of provider: https://edirc.repec.org/data/demiaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.