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.
Details
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Author
Beck, Thorsten, Levine, Ross, Levkov, Alexey
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Document Date
2007/08/01
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Document Type
Policy Research Working Paper
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Report Number
WPS4330
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2010/07/01
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Disclosure Status
Disclosed
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Doc Name
Big bad banks ? the impact of U.S. branch deregulation on income distribution
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Keywords
Finance & Private Sector Development;board of governors of the federal reserve system;federal reserve bank of new york;high levels of income inequality;distribution of wage income;measures of income inequality;access to financial service;per capita income growth;real per capita income;efficient allocation of capital;impact on income distribution;money market mutual fund;income distribution over time;female labor force participation;access to bank loan;
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Citation
Beck, Thorsten Levine, Ross Levkov, Alexey
Big bad banks the impact of U.S. branch deregulation on income distribution (English). Policy Research working paper ; no. WPS 4330 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/285961468328171349/Big-bad-banks-the-impact-of-U-S-branch-deregulation-on-income-distribution