S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Economics, Uppsala University Working Paper Series, Uppsala Center for Labor Studies, Department of Economics, Uppsala University

No 2016:2:
Does Financial Deregulation Boost Top Incomes? Evidence from the Big Bang

Julia Tanndal () and Daniel Waldenström ()

Abstract: This study estimates the impact of financial deregulation on top income shares. Using the novel econometric method of constructing synthetic control groups, we show that the ”Big Bang”-deregulations in the United Kingdom in 1986 and Japan 1997–1999 increased the share of pre-tax incomes going to top earners by over 20 percent in the U.K. and over 10 percent in Japan. The effect is strongest in the top five percentiles in the U.K. whereas it is mainly driven by the lower part of the top decile in Japan. The findings are robust to placebo tests, alterna-tive ways to construct synthetic controls and scrutiny of post-treatment trends. Higher earnings among financial sector employees appear to be an important mechanism behind this result.

Keywords: Income inequality; Synthetic control method; Institutions; (follow links to similar papers)

JEL-Codes: D31; G28; H24; J30; N20; (follow links to similar papers)

71 pages, January 27, 2016

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

381888_32016_2.pdf    PDF-file
Download Statistics

Questions (including download problems) about the papers in this series should be directed to Katarina Grönvall ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:uulswp:2016_002 This page was generated on 2016-02-01 16:09:26