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Title: Bank Branch Supply and the Unbanked Phenomenon

Citation Type: Miscellaneous

Publication Year: 2017

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Abstract: An exogenous increase in the density of bank branches reduces the share of unbanked households among low-income households. This finding is established using US interstate branching deregulation between 1994 and 2010 as an exogenous shock to the entry of new branches in poor counties. We exploit household level data, and show that the effect is stronger for populations that are more likely to be rationed by banks, such as black households living in "high racially-bias" states, or for households living in rural areas where branch density is initially low. We then use deregulation to instrument the likelihood of holding a bank account and subsequently explore the effect on wealth accumulation. Holding a bank account helps poor household to accumulate wealth.

Url: https://www.mccombs.utexas.edu/~/media/Files/MSB/Centers/HMTF/TFF/Celerier_Matray.pdf

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Authors: Celerier, Claire; Matray, Adrien

Publisher: University of Toronto

Data Collections: IPUMS CPS

Topics: Other

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