Working Paper: NBER ID: w25812
Authors: Steven Sprick Schuster; Matthew Jaremski; Elisabeth Ruth Perlman
Abstract: Seeking to reach the unbanked, the United States Postal Savings System provided a federally insured savings alternative to traditional banks. Using novel datasets on postal deposits, demographic characteristics, and banks, we study how and by whom the System was used. We find the program was initially used by non-farming immigrant populations for short-term saving, then as a safe haven during the Great Depression, and finally as long-term investment for the wealthy during the 1940s. However, even during the earliest period, Postal Savings was only a partial substitute for traditional banks, as locations with banks often still heavily used postal savings.
Keywords: postal savings; banks; commercial banking; savings bank competition; unbanked; underbanked
JEL Codes: N22; G21; H42
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Economic conditions (e.g., the Great Depression) (N13) | usage patterns of postal savings (L87) |
| Banking instability (F65) | increased postal savings deposits (L87) |
| Establishment of banks (G21) | decreased postal deposits (L87) |
| Usage of postal savings by non-farming immigrant populations (J68) | changes over time in user demographic (J11) |
| Postal savings served as a partial substitute for traditional banks (G21) | complex interplay between banking access and postal savings usage (G21) |