Financial Inclusion, Human Capital, and Wealth Accumulation: Evidence from the Freedman’s Savings Bank

57 Pages Posted: 18 Dec 2018 Last revised: 15 Apr 2019

See all articles by Luke C.D. Stein

Luke C.D. Stein

Arizona State University (ASU) - Finance Department

Constantine Yannelis

New York University Leonard N. Stern School of Business; University of Chicago Booth School of Business

Date Written: March 31, 2019

Abstract

This paper studies how access to financial services among a previously unbanked group affects human capital, labor market, and wealth outcomes. We use novel data from the Freedman’s Savings Bank—created following the American Civil War to serve free Blacks—employing an instrumental variables strategy exploiting the staggered rollout of bank branches. Families with accounts are more likely to have children in school, be literate, work, and have higher occupational income, business ownership and real estate wealth. Placebo effects are not present using planned but unbuilt branches, or for Whites, suggesting significant positive effects of financial inclusion.

Keywords: Financial inclusion, access to finance, banking and labor markets, African American economic history

Suggested Citation

Stein, Luke C.D. and Yannelis, Constantine, Financial Inclusion, Human Capital, and Wealth Accumulation: Evidence from the Freedman’s Savings Bank (March 31, 2019). Available at SSRN: https://ssrn.com/abstract=3302996

Luke C.D. Stein (Contact Author)

Arizona State University (ASU) - Finance Department ( email )

W. P. Carey School of Business
PO Box 873906
Tempe, AZ 85287-3906
United States
480-965-9412 (Phone)
480-965-8539 (Fax)

HOME PAGE: http://www.lukestein.com

Constantine Yannelis

New York University Leonard N. Stern School of Business ( email )

Suite 9-160
New York, NY
United States

University of Chicago Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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