TY  - JOUR
AU  - Beck,Thorsten
AU  - Levine,Ross
AU  - Levkov,Alexey
TI  - Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13299
PY  - 2007
Y2  - August 2007
UR  - http://www.nber.org/papers/w13299
L1  - http://www.nber.org/papers/w13299.pdf
N1  - Author contact info:
Thorsten Beck
The World Bank
1818 H Street N.W.
Mail Stop MC 3-307
Washington, D.C. 20433
E-Mail: tbeck@worldbank.org

Ross Levine
Department of Economics
Brown University
64 Waterman Street
Providence, RI 02912
Tel: 401/863-2170
E-Mail: ross_levine@brown.edu

Alexey Levkov
Financial Economist
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA 02210
E-Mail: Alexey.Levkov@bos.frb.org
AB  - By studying intrastate branch banking reform in the United States, this paper provides evidence that financial markets substantively influence the distribution of income. From the 1970s through the 1990s, most states removed restrictions on intrastate branching, which intensified bank competition and improved efficiency. Exploiting the cross-state, cross-time variation in the timing of bank deregulation, we evaluate the impact of liberalizing intrastate branching restrictions on the distribution of income. We find that branch deregulation significantly reduced income inequality by boosting the incomes of lower income workers. The reduction in income inequality is fully accounted for by a reduction in earnings inequality among salaried workers.
ER  -