Data and Code for: Intersectionality and Financial Inclusion in the United States

There is a rich microfinance and development economics literature that addresses financial inclusion issues in developing countries around the world (see, for example, Beck, Demirgüç- Kunt, and Peria 2008). Yet, limited attention has been given to issues surrounding financial inclusion within developed countries, despite the financial systems in developed countries being far from totally inclusive. Recent estimates indicate that approximately 8.4 million households in the United States are unbanked (i.e., do not have an account at an insured financial institution), with an additional 24.2 million households being classified as underbanked (i.e., use alternative financial services, or “AFS”). <br><br>Hogarth, Anguelov, and Lee (2004) use the Survey of Consumer Finances to classify and examine the reasons US households are unbanked and find substantial heterogeneity among households in terms of their reasons and motivations for not having a checking account. Rhine and Greene (2013) find that US families are significantly more likely to become unbanked when there is a decline in family income, loss of employment, or loss of health insurance coverage. Specific demographic factors also have been shown to be correlated with being underbanked. Birkenmaier and Fu (2015) show that financial knowledge, age, gender, marital status, education, household income, and home ownership are significantly associated with AFS usage.<br> <br>In contrast with previous literature that focuses on specific household characteristics as possible explanations for financial exclusion, this paper builds on the concept of intersectionality to examine how the intersection of demographic characteristics is related to financial inclusion in the United States.2 In this paper, we focus on the intersection of race and gender to better understand the probability of being unbanked and underbanked in the United States. Additionally, we look at which drivers could be chief contributors to financial exclusion for specific race and gender groups. <br><br>We find that Black women are more likely than any other group to be unbanked or to be underbanked. While much of the literature has focused on fees (Parrish and Frank 2011) and trust (Chatterji, Luo, and Seamans 2015) as the most likely explanations for financial exclusion, we find that, compared with any other race and gender subgroup, lack of money (limited wealth) is more frequently cited by Black women as the primary rationale for why they do not engage with the banking system.