Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/33461
Authors: 
Wozniak, Abigail
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers 1957
Abstract: 
This paper asks how deregulation intended to promote competition in the commercial banking industry affected the compensation structure for banking employees. Using establishment-based data from the Employment Cost Index Survey of the U.S. Bureau of Labor Statistics, I obtain measures of the level and distribution of wage and benefits compensation within industries. I then compare changes in compensation in the banking industry to changes in unaffected industries across states and over time to identify the effects of deregulation. Banking deregulation had no effect on compensation levels or inequality in the industry as a whole, but this masks conflicting changes within the compensation structure. Manager wages fell while non-manager wages held steady, leading to a large decline in between-occupation compensation inequality. In contrast, between-establishment inequality increased dramatically. Deregulation also led to increases in inequality among managers despite their falling wages and to significant shifts in the types of non-wage benefits banking employees received.
Subjects: 
total compensation
compensation inequality
product market competition
commercial banking
JEL: 
J31
L11
Document Type: 
Working Paper

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