Credit Cooperatives and Financial Inclusion: Evidence from Québec

Joint with Bill Dorval

Abstract: Expanding access to financial services is an ongoing public policy goal, yet the economic benefits are not well understood.  This paper uses the spread of non-bank financial intermediaries throughout rural Québec at the beginning of the twentieth century to study how expanding access to financial services affects regional development.  We construct a novel data set of the universe of credit cooperatives in Québec between 1911-1931 which we combine with spatial, archival, and census data. Using propensity score matching we show that the entry of credit unions stemmed the exit of farms and increased the growth rate of acres under cultivation and field-crop output, while preserving the French-Canadian rural population between 1910 and 1930.



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