Financial exclusion, depopulation, and ageing: An analysis based on panel data

This paper focuses on the relationship between rural depopulation and territorial financial exclusion. We provide a replicable statistical methodology to identify the existing patterns at municipal level based on the degree of financial exclusion caused by the absence (named as Type I financial exclusion) or paucity (named as Type II financial exclusion) of bank branches. Firstly, the extent to which the sociodemographic characteristics of a municipality influence its degree and type of financial exclusion is analyzed by using panel data regression models. Secondly, by means of cluster analysis techniques, a typology of municipalities is provided that takes into account their sociodemographic characteristics as well as their availability of bank branches. Within this context, this paper explores the case of Arag ' on (Spain), a European region with significant depopulation and over-ageing problems. Our results show a lack of homogeneity across Aragonese municipalities, both in the processes of depopulation and financial exclusion. This heterogeneity has led us to propose financial inclusion measures tailored to the population size as well as the degree of ageing, the employment possibilities, and labor dynamism of each group of municipalities. In other words, this paper reveals the need to propose measures that accommodate each territory's peculiarities, which could contribute to the achievement of sustainable territorial development in Arag ' on.