Bank Deregulation and Income Inequality

http://www.futureofcapitalism.com/2010/10/bank-deregulation-and-income-inequality

Just published in the Journal of Finance is a paper titled "Big Bad Banks? The Winners and Losers from Bank Deregulation in the United States." The authors are Thorsten Beck of Tilburg University and Ross Levine and Alexey Levkov, both of Brown University. From the abstract:

We assess the impact of bank deregulation on the distribution of income in the United States. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved bank performance. Exploiting the cross-state, cross-time variation in the timing of branch deregulation, we find that deregulation materially tightened the distribution of income by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. Bank deregulation tightened the distribution of income by increasing the relative wage rates and working hours of unskilled workers.

Thanks to reader-participant-community member-watchdog-content co-creator R.U. for sending the tip.

by Editor  |  Oct 4, 2010 at 8:39 am Related Topics:  Banking, Capital Markets Regulation, Education, Income Inequality receive the latest by email: subscribe to the free futureofcapitalism.com mailing list