Access to finance among minority elders

The main goal of this research project is to determine what factors explain lack of participation in the formal financial sector (the literature use the term financial exclusion to denote this condition) among older Latinos and African Americans in the United States and to assess the impact of lack of participation on the financial sector on their wellbeing, with a focus on health outcomes. The lack of participation in the financial sector among minority elders is notorious in the Health and Retirement Study (HRS). When individuals 65 years and older are asked whether they have a checking or savings account of a money market fund in the 2008 wave, only 7 percent of the white non-Hispanics has no access to basic financial services. This contrasts significantly with the other groups, where 42 and 31 percent of Latinos and African Americans 65 years and older will have no access to basic financial services, respectively.

Using HRS data, we will study the factors explaining financial exclusion among the older Latino and African American populations. With the HRS data we will also study whether financial exclusion has a negative effect on well being of these groups, with a focus on health outcomes, including self-rated health, numbers of chronic conditions, physical and cognitive functioning, blood pressure, and relative weight. When using HRS data, this analysis uses data between the 2000 and 2010 waves and includes all the individuals 51 years and older, where we make a distinction among those 65 years and older.