An Empirical Research Of Financial Development Affects Employment Growth

The economy of our country has greatly increased since the reform and open-uppolicy,Meanwhile, the level of financial development is very significant.By the end of2013, financial institutions outstanding obligation is117.4trillion, the outstanding loanis71.9, The money supply (at the end of the year) from19901.52934trillion to2013110.6525trillion, capital market development, the total market value of quoted company in2013reached23.9077trillion,Transactions of shares on the stock exchange is48.8729trillion.As Mckinnon index,our country’s index Increased from0.16in1978to1.95in2012,increased179percentage points.This level is also higher than many countries in the world. Finance is the core of modern economy, our economy has already penetrated into all aspects ofour economy and social life. Finance has the important status in the economic and social development.On the other hand, employment pressure of our country is still large.There is many reason. Firstly,our country has a large population.We need a lot of jobs every year. A second factor is uneven development between the urban and rural areas.thirdly, the increasing of economy has a low effect to employment.This paper will connect these two economical phenomena together and give a deepresearch whether the development of financial effects employment through theory anddemonstration.Based on the1990-2012panel data of Chinese provinces, this paper discussesthe relationship between financial development and employment growth by using theextended C-D function.The result shows: Financial development to promote employmentfunction is mainly in the private sector credit and financial intervention.Expansion of credit tothe private sector and push for financial system reform is good for employment. It was alsofound that technological progress has a positive role in promoting the growth of employmentin our country.