Growing Up without Finance

The Financial Services Environment and Schools' Savings Rates in the San Francisco Kindergarten to College Program

“…In other words, the numbers of banks, credit unions, and alternative financial service providers that surround elementary schools are associated with the percentage of students within those schools that contribute to their K2C account. This finding aligns with existing evidence that the locations of brick-and-mortar financial services are associated with financial outcomes (Brown, Cookson, and Heimer 2016;West 2017a, 2019;Kerr and Nanda 2009;Melzer 2011), and that the locations of fast-food restaurants in proximity to schools are associated with students' health outcomes (Austin et al 2005;Davis and Carpenter 2009;Zenk and Powell 2008). This relationship may be explained by composition and proximity of the local financial services environment (Bhutta 2014;Brown, Cookson, and Heimer 2016;Melzer 2011), as well as social mechanisms that develop shared beliefs about using these services (Friedline and Kepple 2017).…”

“…However, unevenly distributed impacts driven in part by variations in local contexts and financial services environment could undermine CSAs' potential. Despite the proliferation of online and mobile banking and the ability for these technologies to close geographic gaps to financial services (Friedline 2018), the locations of brick-and-mortar banks, credit unions, and alternative financial services providers remain associated with financial outcomes (Bhutta 2014;Brown, Cookson, and Heimer 2016;Friedline and Kepple 2017;Kerr and Nanda 2009;Melzer 2011). Similar relationships may be observable in school-based CSA programs, where variations in the local financial services environment could affect children's program participation.…”

“…Variations in the local financial services environment matter because of the relationships between neighborhoods' brick-and-mortar financial services and their residents' participation in economic life, such as paying bills (Friedline, Despard, and West 2017a), receiving health care (Eisenberg-Guyot et al 2018;Melzer 2011), and accessing credit (Bertrand and Morse 2011;Bhutta 2014;Bhutta, Skiba, and Tobacman 2015;Friedline et al 2017b). For instance, having banks within closer proximity to or more highly concentrated in neighborhoods is associated with being more likely to use these financial services, have access to credit, and experience increased opportunities for entrepreneurship (Brown, Cookson, and Heimer 2016;Friedline et al 2017b;Kerr and Nanda 2009). The lack of bank access negatively impacts local small business lending, which leads to a reduction in employment growth rates, and these effects are particularly found to affect those living in lower-income neighborhoods (Nguyen 2014).…”

Financial literacy and responsible finance in the FinTech era: capabilities and challenges

“…4. In a recent quasi-experimental study examining the impact of Congressional legislation inducing unintended differences in financial market development across Native-American reservations, Brown et al (2019) show that, by increasing financial literacy and financial trust, early life exposure to local financial institutions increased household financial inclusion and induced long-term improvements in consumer credit outcomes. 5.…”

Banks and the real economy: An assessment of the research

“…Banks also manage credit, solvency, interest rate, foreign exchange rate, liquidity, and other risks via diversification, derivatives, and other on-and off-balance sheet activities. Without banks and other financial services providers, entrepreneurs could only start new businesses that drive innovation and economic growth if they were born rich or accumulated capital over time (Zingales, 2015;Brown, Cookson and Heimer, 2019).…”