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Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income

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  • Quanda Zhang
  • Alberto Posso

Abstract

Using national representative household finance survey data covering more than 6200 Chinese households, we first construct a new multidimensional indicator for financial inclusion. Then we examine the effect of financial inclusion on household income. Our results elicit several findings. First, financial inclusion has a strong positive effect on household income. This effect can be found across all households with different levels of income. Second, low-income households are found to benefit more from financial inclusion than high and mid-level income ones. We argue that, in this sense, financial inclusion helps reduce income inequality.

Suggested Citation

  • Quanda Zhang & Alberto Posso, 2019. "Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income," Journal of Development Studies, Taylor & Francis Journals, vol. 55(7), pages 1616-1631, July.
  • Handle: RePEc:taf:jdevst:v:55:y:2019:i:7:p:1616-1631
    DOI: 10.1080/00220388.2017.1380798
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