People who have served time in jail or prison are less likely to have bank accounts after they are released than they were before serving time, which may hinder their long-term financial security, according to new research.

"Locked out of banking: The limits of financial inclusion for formerly incarcerated individuals" was authored by Brielle Bryan, an assistant professor of sociology at Rice University and J. Michael Collins, a professor of public affairs and human ecology and the Fetzer Family Chair in Consumer and Personal Finance at the University of Wisconsin-Madison. It is one of the first studies examining how incarceration status changes banking access. The work is published in the journal Social Science Research.

"Financial inclusion has become a big concern globally when thinking about how to eradicate poverty and promote opportunity among the most marginalized members of society," Bryan said. "With this study, we wanted to turn that lens toward formerly incarcerated Americans, who we know are among the most marginalized in America today."

The researchers found that overall, bank account ownership decreased significantly after incarceration, and women and Hispanic individuals were more likely to lose access to banking following incarceration compared to other groups. The researchers also found that those who were able to maintain bank accounts while incarcerated were disproportionately white and had higher levels of education.

"Our study cannot say exactly why incarceration appears to reduce bank account access, but we have a few theories," Bryan said. "We don't think it has to do with lack of trust in banks among people with criminal justice system contact, because we don't find that pretrial detention or arrests reduce bank account ownership."

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