Financial inclusion: what’s it worth?

Arbeitspapier

This paper studies the determinants of being unbanked in the euro area and the United States as well as the effects of being unbanked on wealth accumulation. Based on household-level data from the euro area Household Finance and Consumption Survey and the U.S. Survey of Consumer Finance, it first documents that there are, respectively, 3.6% and 7.5% of unbanked households in the two economies. Low-income households, unemployed households and those with a poor education are the most likely to be affected, and remarkably more so in the United States than in the euro area. At the same time, there is a role for government policies in fostering financial inclusion. Using a propensity score matching approach to estimate the effects of being unbanked, it is found that banked households report substantially higher net wealth than their unbanked counterparts, with a gap of around €74,000 for the euro area and $42,000 for the United States. A potential reason for this wealth difference is that banked households are considerably more likely to accumulate wealth via ownership of their main residence.

Object Details

• ISBN: 978-92-899-2708-6
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 1990

Classification and Topics

• Classification: Wirtschaft ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Financial Institutions and Services: Government Policy and Regulation ; Household Saving; Personal Finance
• Subject: financial inclusion ; household finance ; propensity score matching

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ampudia, Miguel ; Ehrmann, Michael
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2017

Further information

• DOI: doi:10.2866/979715
• Handle: http://hdl.handle.net/10419/154423
• Last update: 10.03.2025, 11:44 AM CET