Abstract

http://ssrn.com/abstract=2449922
 


 



The Revolving Door and Worker Flows in Banking Regulation


David O. Lucca


Federal Reserve Banks - Federal Reserve Bank of New York

Amit Seru


University of Chicago - Booth School of Business and NBER

Francesco Trebbi


University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

November 14, 2013


Abstract:     
This paper traces career transitions of federal and state U.S. banking regulators from a large sample of publicly available curricula vitae, and provides basic facts on worker flows between the regulatory and private sector resulting from the revolving door. We find strong countercyclical net worker flows into regulatory jobs, driven largely by higher gross outflows into the private sector during booms. These worker flows are also driven by state-specific banking conditions as measured by local banks’ profitability, asset quality and failure rates. The regulatory sector seems to experience a retention challenge over time, with shorter regulatory spells for workers, and especially those with higher education. Evidence from cross-state enforcement actions of regulators shows gross inflows into regulation and gross outflows from regulation are both higher during periods of intense enforcement, though gross outflows are significantly smaller in magnitude. These results appear inconsistent with a "quid-pro-quo" explanation of the revolving door, but consistent with a "regulatory schooling" hypothesis.

Number of Pages in PDF File: 44

Keywords: Banking Regulation, Revolving Door, Inter-industry Worker Flows

JEL Classification: G21, G28

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Date posted: June 14, 2014  

Suggested Citation

Lucca, David O. and Seru, Amit and Trebbi, Francesco, The Revolving Door and Worker Flows in Banking Regulation (November 14, 2013). Available at SSRN: http://ssrn.com/abstract=2449922 or http://dx.doi.org/10.2139/ssrn.2449922

Contact Information

David O. Lucca
Federal Reserve Banks - Federal Reserve Bank of New York ( email )
33 Liberty Street
New York, NY 10045
United States
Amit Seru (Contact Author)
University of Chicago - Booth School of Business and NBER ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Chicago Booth School of Business Logo

Francesco Trebbi
University of British Columbia (UBC) - Department of Economics ( email )
997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
HOME PAGE: http://faculty.arts.ubc.ca/ftrebbi/
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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