Bank deregulation and racial inequality in America

Levine, Ross, Levkov, Alexey and Rubinstein, Yona ORCID: 0009-0000-6740-2803 (2013) Bank deregulation and racial inequality in America. Critical Finance Review, 3 (1). pp. 1-48. ISSN 2164-5744

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Abstract

We use the cross-state, cross-time variation in bank deregulation across the U.S. states to assess how improvements in banking systems a§ected the labor market opportunities of black workers. Bank deregulation from the 1970s through the 1990s improved bank e¢ ciency, lowered entry barriers facing nonÖnancial Örms, and intensiÖed competition for labor throughout the economy. Consistent with Beckerís (1957) seminal theory of racial iscrimination, we Önd that deregulation-induced improvements in the banking system boosted blacksírelative wages by facilitating the entry of new Örms and reducing the manifestation of racial prejudices in labor markets.

Item Type:	Article
Official URL:	http://www.nowpublishers.com/journals/Critical%20F...
Additional Information:	© 2013 The Authors
Divisions:	Management
Subjects:	H Social Sciences > HG Finance
JEL classification:	D - Microeconomics > D3 - Distribution D - Microeconomics > D4 - Market Structure and Pricing > D43 - Oligopoly and Other Forms of Market Imperfection G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc. J - Labor and Demographic Economics > J7 - Labor Discrimination
Date Deposited:	18 Mar 2014 09:15
Last Modified:	12 Dec 2024 00:25
URI:	http://eprintstest.lse.ac.uk/id/eprint/51625

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