Key points are not available for this paper at this time.
How does financial deregulation contribute to the rising finance wage premium in the US? This study uses the Interstate Banking and Branching Efficiency Act of 1994 as an exogenous shift to local banking markets and investigates the effect of branching deregulation on relative wages in finance. We find that the finance wage premium increased significantly in deregulated states, driven by direct effects on wages in commercial banking and spillover effects on the broader financial industry. Our estimates suggest that the deregulation explains approximately a quarter of the increase in the finance wage premium between 1994 and 2008.
Taşkın et al. (Wed,) studied this question.