The division of spoils: Rent-sharing and discrimination in a regulated industry

Until the middle of the 1970's, regulations constrained banks' ability to e nter new markets. Over the subsequent 25 years, states gradually lifted the se restrictions. This paper tests whether rents fostered by regulation were shared with labor, and whether firms were discriminating by sharing these rents disproportionately with male workers. We find that average compensati on and average wages for banking employees fell after states deregulated. M ale wages fell by about 12 percent after deregulation, whereas women's wage s fell by only 3 percent, suggesting that rents were shared mainly with men . Women's share of employment in managerial positions also increased follow ing deregulation.