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Financial exclusion in developed countries: a field experiment among migrants and low-income people in Italy

Author

Listed:
  • Giorgia Barboni
  • Alessandra Cassar
  • Timothée Demont

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We designed an experiment to estimate the socioeconomic and behavioral characteristics associated with financial exclusion in a developed economy and the demand for savings products progressively trading-off flexibility for commitment. Our sample includes people in Italy living below the poverty line, stratified by migration status. Despite a large bank branch penetration in the study area, we find a high rate of financial exclusion, with households below the sample median income being unbanked at twice the rate of those above (30% vs. 15%), a difference that is especially significant for migrants. Financial exclusion is associated with poverty and social exclusion, as measured by unemployment, low food consumption, and little help from personal networks. Despite a high-declared willingness to open new accounts and a strong interest in commitment products following a financial education training seminar, actual uptake in the year to follow remains low, suggesting that demand-driven factors besides knowledge hamper access to formal financial services, namely incomes that are perceived too low to make accounts worthwhile. Yet, migrants, especially if non-Muslim, appear more willing to become financially included than non-migrants, suggesting that there are gains to be made by targeting minorities.

Suggested Citation

  • Giorgia Barboni & Alessandra Cassar & Timothée Demont, 2017. "Financial exclusion in developed countries: a field experiment among migrants and low-income people in Italy," Post-Print hal-01612054, HAL.
    • Handle: RePEc:hal:journl:hal-01612054
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    Cited by:

    1. US Thathsarani & Jianguo Wei & GRSRC Samaraweera, 2021. "Financial Inclusion’s Role in Economic Growth and Human Capital in South Asia: An Econometric Approach," Sustainability, MDPI, vol. 13(8), pages 1-18, April.
    2. Christian T. Elbaek & Ifeatu Uzodinma & Zilia Ismagilova & Panagiotis Mitkidis, 2022. "Suppetia ex machina: How can AI technologies aid financial decision-making of people with low socioeconomic status?," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 6(S1), pages 49-57, July.
    3. NGONYANI, Danstun, 2022. "Financial Inclusion In Developing Countries. A Review Of The Literature On The Costs And Implications," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 26(1), pages 54-77, March.

    More about this item

    Keywords

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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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