NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Racial Discrimination and Competition

Ross Levine, Alexey Levkov, Yona Rubinstein

NBER Working Paper No. 14273
Issued in August 2008
NBER Program(s):   CF   LS

This paper assesses the impact of competition on racial discrimination. The dismantling of inter- and intrastate bank restrictions by U.S. states from the mid-1970s to the mid-1990s reduced financial market imperfections, lowered entry barriers facing nonfinancial firms, and boosted the rate of new firm formation. We use bank deregulation to identify an exogenous intensification of competition in the nonfinancial sector, and evaluate its impact on the racial wage gap, which is that component of the black-white wage differential unexplained by Mincerian characteristics. We find that bank deregulation reduced the racial wage gap by spurring the entry of non- financial firms. Consistent with taste-based theories, competition reduced both the racial wage gap and racial segregation in the workplace, particularly in states with a comparatively high degree of racial prejudice, where competition-enhancing bank deregulation eliminated about one-quarter of the racial wage gap after five years.

download in pdf format
   (774 K)

email paper

This paper is available as PDF (774 K) or via email.

This paper was revised on December 5, 2011

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14273

Users who downloaded this paper also downloaded these:
Lang and Lehmann w17450 Racial Discrimination in the Labor Market: Theory and Empirics
Charles and Guryan w17156 Studying Discrimination: Fundamental Challenges and Recent Progress
Charles and Guryan w13661 Prejudice and The Economics of Discrimination
Beck, Levine, and Levkov w13299 Big Bad Banks? The Impact of U.S. Branch Deregulation on Income Distribution
Price and Wolfers w13206 Racial Discrimination Among NBA Referees
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us