The Division of Spoils: Rent-Sharing and Discrimination in a Regulated Industry

Sandra Black and Philip E. Strahan

American Economic Review, 2001, vol. 91, issue 4, 814-831

Abstract: Until the middle of the 1970s, regulations constrained banks' ability to enter new markets. Over the subsequent 25 years, states gradually lifted these restrictions. This paper tests whether rents fostered by regulation were shared with labor, and whether firms were discriminating by sharing these rents disproportionately with male workers. We find that average compensation and average wages for banking employees fell after states deregulated. Male wages fell by about 12 percent after deregulation, whereas women's wages fell by only 3 percent, suggesting that rents were shared mainly with men. Women's share of employment in managerial positions also increased following deregulation.

JEL-codes: G21 G28 J31 J71 L51 (search for similar items in EconPapers)
Date: 2001
Note: DOI: 10.1257/aer.91.4.814
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Citations: View citations in EconPapers (302)

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