Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution
Tilburg University - European Banking Center, CentER
UC Berkeley; Milken Institute; National Bureau of Economic Research (NBER)
Brown University - Department of Economics
August 1, 2007
World Bank Policy Research Working Paper No. 4330
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.
Number of Pages in PDF File: 42
Keywords: Emerging Markets, Economic Theory & Research, Inequality, Fiscal & Monetary Policyworking papers series
Date posted: August 31, 2007
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