Bank-Branch Supply, Financial Inclusion and Wealth Accumulation

72 Pages Posted: 7 Feb 2014 Last revised: 2 Dec 2019

See all articles by Claire Celerier

Claire Celerier

University of Toronto - Rotman School of Management

Adrien Matray

Princeton University

Date Written: July 15, 2018

Abstract

This paper studies the impact of financial inclusion on wealth accumulation. Exploiting the US interstate branching deregulation between 1994 and 2005, we find that an exogenous expansion of bank branches increases low-income household financial inclusion. We then show that financial inclusion fosters household wealth accumulation. Relative to their unbanked counterparts, banked households accumulate assets in interest bearing accounts, invest more in durable assets such as vehicles, have a better access to debt, and have a lower probability of facing financial strain. The results suggest that promoting financial inclusion for low-income populations can improve household wealth accumulation and financial security.

Keywords: Banks, Regulation, Imperfect Competition, Household Finance, Discrimination

JEL Classification: G21, G28, D14, D43, J15

Suggested Citation

Celerier, Claire and Matray, Adrien, Bank-Branch Supply, Financial Inclusion and Wealth Accumulation (July 15, 2018). Review of Financial Studies, 2019, Volume 32, Issue 12, Available at SSRN: https://ssrn.com/abstract=2392278 or http://dx.doi.org/10.2139/ssrn.2392278

Claire Celerier (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Adrien Matray

Princeton University ( email )

Bendheim Center for Finance
26 Prospect Avenue
Princeton, NJ 08540
United States

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