Financial Inclusion Across the United States

We study retirement and bank account participation for the universe of U.S. households with a member aged 50 to 59 in the administrative tax data. ZCTA-level average income, income inequality, and racial composition predict retirement account participation for low-income households, conditional on household income and regional price parities. Income inequality also predicts bank account participation for low-income households. We estimate the causal effect of access to an employer retirement plan on participation. Recent policy proposals for universal access with automatic enrollment could increase participation by 19 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: Suggested Citation

Yogo, Motohiro and Whitten, Andrew and Cox, Natalie, Financial Inclusion Across the United States (January 29, 2025). Available at SSRN: https://ssrn.com/abstract=3934498 or http://dx.doi.org/10.2139/ssrn.3934498