Big bad banks ? the impact of U.S. branch deregulation on income distribution

Thorsten Beck (), Ross Levine () and Alexey Levkov

No 4330, Policy Research Working Paper Series from The World Bank

Abstract: Policymakers and economists disagree about the impact of bank regulations on the distribution of income. Exploiting cross-state and cross-time variation, the authors test whether liberalizing restrictions on intra-state branching in the United States intensified, ameliorated, or had no effect on income distribution. The analysis finds that branch deregulation lowered income inequality by affecting labor market conditions, not by boosting the business income of the poor, nor by enhancing educational attainment. Reductions in the earnings gap between men and women and between skilled and unskilled workers account for the bulk of the explained drop in income inequality.

Keywords: Emerging Markets; Economic Theory&Research; Inequality; Fiscal&Monetary Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab, nep-mac and nep-reg
Date: 2007-08-01
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Working Paper: Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution (2007)
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