Racial Discrimination and Competition

Ross Levine (), Alexey Levkov and Yona Rubinstein

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We provide the first assessment of whether an intensification of product market competition reduces the racial wage gap exactly where taste-based theories predict that competition will reduce labor market discrimination. in economies where employers have strong racial prejudices. We use bank deregulation across the U.S. states to identify an intensification of competition among banks, which in turn lowered entry barriers facing nonfinancial firms, especially firms that depend heavily on bank credit. Consistent with taste-based theories, we find that competition boosted blacks' relative residual wages within the banking industry and bank-dependent industries, but only in states with strong tastes for discrimination.

Keywords: Discrimination; imperfect competition; banks; regulation (search for similar items in EconPapers)
JEL-codes: D3 D43 G21 G28 J31 J7 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-ban, nep-com, nep-lab, nep-lma and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Racial discrimination and competition (2011)
Working Paper: Racial Discrimination and Competition (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp1069

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