Campus Units

Finance

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

12-2019

Journal or Book Title

Journal of Financial Economics

Volume

134

Issue

3

First Page

591

Last Page

616

DOI

10.1016/j.jfineco.2019.05.006

Abstract

Early life exposure to local financial institutions increases household financial inclusion and leads to long-term improvements in consumer credit outcomes. We identify the effect of local financial markets using Congressional legislation that led to unintended differences in financial market development across Native American reservations. Individuals from financially underdeveloped reservations enter consumer credit markets later, and upon reaching adulthood, have ten point lower credit scores and four percentage point more delinquent accounts. These effects are long-lived and depreciate slowly after individuals move to more developed areas. Formative exposures to local banking improve consumer credit behavior by increasing financial literacy and financial trust.

Comments

This accepted article is published as Brown, J.R., Cookson, J.A., Heimer, R.Z., Growing Up Without Finance. Journal of Financial Economics, Dec 2019, 134(3);591-616. Doi: 10.1016/j.jfineco.2019.05.006. Posted with permission.

Copyright Owner

Elsevier B.V.

Language

en

File Format

application/pdf

Published Version

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