Template-Type: ReDIF-Paper 1.0
Author-Name:  Bent E. Sørensen
Author-X-Name-First: Bent 
Author-X-Name-Last: Sørensen
Author-Email:  bent.sorensen@mail.uh.edu
Author-Workplace-Name: Department of Economics, University of Houston
Author-Name:  Yuliya Demyanyk	
Author-X-Name-First: Yuliya 
Author-X-Name-Last: Demyanyk
Author-Workplace-Name: Department of Economics, University of Houston
Author-Email: ydemyanyk@uh.edu
Author-Name:  Charlotte Ostergaard	
Author-X-Name-First: Charlotte
Author-X-Name-Last: Ostergaard
Author-Workplace-Name: Norwegian School of Management and Norges Bank
Author-Email: 
Title: U.S. Banking Deregulation, Small Businesses,and Interstate Insurance of Personal Income
Abstract: We estimate the effects of deregulation of U.S. banking restrictions on the amount of
interstate personal income insurance during the period 1970–2001. Interstate income
insurance occurs when personal income reacts less than one-to-one to state-specific
shocks to output. We find that income insurance improved after banking deregulation,
and that this effect is larger in states where small businesses are more important. We
further show that the impact of deregulation is stronger for proprietors’ income than
other components of personal income. Our explanation of this result centers on the
role of banks as a prime source of small business finance and on the close intertwining
of the personal and business finances of small business owners. Our analysis casts light
on the real effects of bank deregulation, on the insurance function of banks, and on the
integration of bank markets.
Length:  54 pages
Creation-Date:  2005-04
File-URL: http://www.uh.edu/econpapers/RePEc/hou/wpaper/2005-02.pdf
File-Format: Application/pdf
Number: 2005-02
Classification-JEL: 
Keywords: Financial deregulation, integration of bank markets, interstate risk shar-ing, small business finance.
Handle: RePEc:hou:wpaper:2005-02