Full Citation

Title: Bank Deregulation and Racial Inequality in America

Citation Type: Working Paper

Publication Year: 2012

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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 affected the labor market opportunities of black workers. Bank deregulation from the 1970s through the 1990s improved bank efficiency, lowered entry barriers facing nonfinancial firms, and intensified competition for labor throughout the economy. Consistent with Beckers (1957) seminal theory of racial discrimination, we find that deregulation-induced improvements in the banking system boosted blacksrelative wages by facilitating the entry of new firms and reducing the manifestation of racial prejudices in labor markets.

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Authors: Levine, Ross; Rubinstein, Yona; Levkov, Alexey

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Publication Number: 12-5

Institution: Federal Reserve Bank of Boston

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Publisher Location: Boston, MA

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Other, Race and Ethnicity

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