Financial Inclusion Across the United States

42 Pages Posted: 6 Dec 2021 Last revised: 25 Apr 2023

See all articles by Motohiro Yogo

Motohiro Yogo

Princeton University - Department of Economics; National Bureau of Economic Research

Andrew Whitten

U.S. Department of the Treasury - Office of Tax Analysis (OTA)

Natalie Cox

Princeton University - Department of Economics

Date Written: April 24, 2023

Abstract

We study retirement and bank account participation for the universe of U.S. households aged 50 to 59 in the administrative tax data. In the lowest income quintile in 2019, 21 and 70 percent of households had retirement and bank accounts, respectively. For the same group, 38 percent of households had access to an employer retirement plan. Geographic variation in financial participation primarily relates to income rather than racial composition. By instrumental variables, we estimate the causal effect of access to an employer retirement plan. Universal access with automatic enrollment could increase retirement account participation by 17 percentage points in the lowest income quintile over ten years.

Keywords: Financial participation, Household finance, Inequality, Racial disparities, Tax policy

JEL Classification: D14, G51

Suggested Citation

Yogo, Motohiro and Whitten, Andrew and Cox, Natalie, Financial Inclusion Across the United States (April 24, 2023). Available at SSRN: https://ssrn.com/abstract=3934498 or http://dx.doi.org/10.2139/ssrn.3934498

Motohiro Yogo (Contact Author)

Princeton University - Department of Economics ( email )

Julis Romo Rabinowitz Building
Princeton, NJ 08544
United States

HOME PAGE: http://sites.google.com/site/motohiroyogo/

National Bureau of Economic Research

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Andrew Whitten

U.S. Department of the Treasury - Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave., N.W.
Washington, DC 20220
United States

HOME PAGE: http://andrewwhitten.com

Natalie Cox

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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