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Refining the Definition of the Unbanked

Author

Listed:
  • Elena Falcettoni
  • Vegard M. Nygaard

Abstract

We propose a new way to classify individuals without a bank account, accounting for their actual interest in being banked. Analogous to how unemployment statistics are defined, we differentiate individuals that do not have a bank account and would like to have one (“unbanked”) from individuals that do not have a bank account and are not interested in having one (“out of banking”). Using FDIC data, we show the evolution over time of these new measures and show that the two groups differ in policy-relevant ways. These factors should be considered when designing policies aimed at increasing financial inclusion.

Suggested Citation

  • Elena Falcettoni & Vegard M. Nygaard, 2026. "Refining the Definition of the Unbanked," AEA Papers and Proceedings, American Economic Association, vol. 116, pages 289-293, May.
    • Handle: RePEc:aea:apandp:v:116:y:2026:p:289-293
    DOI: 10.1257/pandp.20261006
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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