Dissertation/Thesis Abstract

The interplay between financial and labor markets
by Levkov, Alexey, Ph.D., Brown University, 2010, 227; 3430139
Abstract (Summary)

The three chapters of the dissertation illustrate the interplay between financial and labor markets. The chapters examine how removal of geographical restrictions on bank branching in the United States between 1960 and 1999 affected union membership, distribution of income, and black-white wage differential in the non-banking sectors.

In the first chapter of the dissertation I use bank branch deregulation as an instrumental variable to identify an exogenous increase in the competitiveness of the non-financial sector and evaluate its impact on union membership. The results indicate that by making the economy more competitive, branch deregulation has a first-order negative impact on union membership in the non-banking sectors.

The second chapter of the dissertation is a joint work with Thorsten Beck from Tilburg University and Ross Levine from Brown University. In this chapter we find that bank branch deregulation materially tightened the distribution of income in the United States by boosting incomes in the lower part of the income distribution while having little impact on incomes above the median. Our findings are explained by rising relative wage rates and working hours of unskilled workers following bank deregulation.

The third chapter of the dissertation is a joint work with Ross Levine and Yona Rubinstein, both from Brown University. Here we use bank branch deregulation as an instrumental variable to identify an exogenous increase in the competitiveness of the non-financial sector and evaluate its impact on black-white wage differential in the entire U.S. economy. We find that bank deregulation reduced the racial wage gap by spurring the entry of nonfinancial 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.

The dissertation relates to an emerging literature that examines the channels underlying the “finance-growth nexus” and advertises the role of labor markets in driving this relationship.

Indexing (document details)
Advisor: Levine, Ross
Commitee:
School: Brown University
School Location: United States -- Rhode Island
Source: DAI-A 71/12, Dissertation Abstracts International
Source Type: DISSERTATION
Subjects: Finance, Economics
Keywords: Bank deregulation, Discrimination, Financial market, Inequality, Labor markets, Unions
Publication Number: 3430139
ISBN: 9781124302430
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