Banking on the Future: Minor-owned Accounts and Financial Inclusion

Banking on the Future: Minor-owned Accounts and  Financial Inclusion


Financial inclusion policies have increasingly focused on unbanked households, including participation in formal financial accounts among the young. In the United States, state-level statutes can allow minors to have non-custodial checking or savings accounts. This paper uses the timing of state minor bank account laws to estimate a difference-in-difference model of account access before age 18 on later-in-life financial behaviors.

We find that the laws increase the likelihood that individuals hold bank accounts, though this average effect decreases after age 20. In addition to an increase in account participation, individuals are less likely to use alternative financial services, including payday loans, pawn shops, auto title loans, and other short-term high interest financing methods. We find that our effects are most pronounced and persistent for individuals who never attend college, people who are more likely to be in the labor force and whose parents may have lower levels of financial capability.

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Accounts Financial inclusion Youth


Carly Urban

Associate Professor of Economics at the Montana State University

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United States

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