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From digital wallets to social dividends: How digital financial inclusion drives household prosocial behavior in China

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  • Zhu, Shujin
  • Chen, He
  • Tang, Yiding

Abstract

This study examines how digital financial inclusion (DFI) triggers prosocial behavior, shifting focus from its well-documented economic impacts to its understudied societal implications. Using longitudinal data from the China Family Panel Studies and city-level DFI indices, we find a 1 % DFI increase raises household donations by 1.47 % via three channels: household financial gains, reduced inequality perceptions, and improved well-being. Geographic peer effects emerge, with prosociality clustering spatially but fading with distance. Married and older heads weaken this relationship: marital status prioritizes family needs over social giving, while older heads’ limited digital skills hinder DFI adoption. These results position DFI as a dual tool—boosting economic engagement while fostering social cohesion—but reveal demographic constraints on its societal benefits. The findings inform policies balancing financial inclusion with social cohesion in developing contexts.

Suggested Citation

  • Zhu, Shujin & Chen, He & Tang, Yiding, 2025. "From digital wallets to social dividends: How digital financial inclusion drives household prosocial behavior in China," Economic Modelling, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325002007
    DOI: 10.1016/j.econmod.2025.107205
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    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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