Consumer Financial Access Trends After the Great Recession: A Latent Transition Analysis

Written By: Julie Birkenmaier, and Qiang (John) Fu

This study examined the U.S. household financial access trends during 2012–2018 after the Great Recession of 2007–2009. Data was from a nationally representative sample (n=2,094) of adults from the American Life Panel who completed questions from the National Financial Capability Study (NFCS) in 2012 and 2018. Latent transition analysis (LTA) was used to examine trends across seven financial access indicators, including banked status and alternative financial services (AFS) use. Results suggest the presence of three latent statuses: Low Access, Partial Access, and High Access. Only 24.5% of people in the Low Access status and 2.6% of people in the Partial Access status in 2012 transitioned into the better financial access status in 2018. Policy and practice implications to improve people’s financial access are discussed.