Department
Finance, Economics & Accounting
Document Type
Article
Publication Date
2024
Abstract
We use recently developed difference-in-differences methodologies and a panel of U.S. states over the period 1960 – 2015 to examine how bank branching deregulation impacted state-level income inequality. Existing research relying on traditional two-way fixed effects (TWFE) estimates and event studies provide mixed results. However, these results potentially suffer from biases due to treatment effect heterogeneity and the failure to account for multiple related treatments. Using bias-corrected difference-in-differences procedures and properly accounting for the timing of treatment, we find evidence that the combined effect of intrastate and interstate banking deregulation increased the income share of the top 10%, 5%, and 1% of income earners, respectively. Conversely, we find no evidence that intrastate branching deregulation in isolation impacted income inequality.
Recommended Citation
Hankins, W. B., Stone, A.-L., & Hoover, G. (2024). Revisiting the effect of bank deregulation on income inequality. Empirical Economics, 66(6), 2625–2657. https://doi.org/10.1007/s00181-023-02527-2
appendix to article
Included in
Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons, Finance and Financial Management Commons
Publication/Presentation Information
Empirical Economics, 66(6), 2625–2657.