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The Determinants of Being Unbanked for U.S. Immigrants


  • Special thanks are extended to Shirley Chiu for her invaluable research assistance. The views expressed are those of the authors and do not necessarily represent the opinions of the Federal Reserve Bank of New York or the Board of Governors of the Federal Reserve System.


Random-effects binary choice models are estimated to identify the attributes that influence the likelihood that immigrants are unbanked. This study finds that the likelihood to be unbanked is higher for immigrants with less education, poverty-level income, or a larger family but lower for immigrants with greater net worth or higher income. Among immigrant groups, Mexican and other Latin American immigrants have the highest rates of being unbanked. Programs aimed at helping immigrants move into the financial mainstream may benefit from taking into account the differences in socioeconomic attributes and migration experiences of specific populations.