Consolidation of Banks and Its Impact on Minority-Income Dynamics

Authors

Salvador Contreras, The University of Texas Rio Grande ValleyFollow
Amit Ghosh, Texas A&M International University

Document Type

Article

Publication Date

9-2025

Abstract

A defining feature of the US banking industry is the persistent stream of mergers and acquisitions. This paper explores an important public policy issue: does bank M&A activity affect the income and employment dynamics of minority groups? Using 2005–2020 data from the ACS, we find that exposure to M&A activity likely affects the incomes and hourly wages of Asians and Hispanics and is positively associated with the hours worked by Asians and Blacks. We find that M&A activity is associated with an increase in the probability of Asians becoming self-employed and a decrease for Hispanics. Our findings are robust to the use of several identification strategies. These results are explained by the negative relationship between M&A activity and small business lending and credit supply.

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Recommended Citation

Contreras, S. and Ghosh, A. (2025) “Consolidation of Banks and Its Impact on Minority-Income Dynamics,” Journal of Economics, Race, and Policy, 8(3), pp. 233–256. Available at: https://doi.org/10.1007/s41996-024-00164-0.

Publication Title

Journal of Economics, Race, and Policy

DOI

10.1007/s41996-024-00164-0