Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution

42 Pages Posted: 20 Apr 2016

See all articles by Thorsten Beck

Thorsten Beck

City University London - Sir John Cass Business School; Tilburg University - European Banking Center, CentER

Ross Levine

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Alexey Levkov

Brown University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 1, 2007

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

Suggested Citation

Beck, Thorsten and Levine, Ross Eric and Levkov, Alexey, Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution (August 1, 2007). World Bank Policy Research Working Paper No. 4330. Available at SSRN: https://ssrn.com/abstract=1010515

Thorsten Beck

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Tilburg University - European Banking Center, CentER ( email )

PO Box 90153
Tilburg, 5000 LE
Netherlands

Ross Eric Levine

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alexey Levkov (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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