Explaining The Gender Gap in Access to Traditional and Digital Financial Integration in The Aftermath of Covid-19: A Case Study of Palestine

This research investigates the factors contributing to the traditional and digital financial inclusion (FI) gender gap in Palestine and how it was shaped by the ramifications of the COVID-19 pandemic. Using secondary data from two nationwide FI surveys conducted in 2016 and 2022, the study employs an Oaxaca-Blinder decomposition and an intertemporal decomposition to analyze the changes in gender discrimination in financial literacy and access to financial services over time. Our results show a persistently high FI gender gap in 2016 and 2022. There is a worsening or unchanged FI gender gap in most aspects, including access to bank accounts, formal borrowing, and the adoption of digital financial services. Only the gender gap in access to private insurance decreased between 2016 and 2022, which is generally low in Palestine. The widening FI gender gap is driven by discrimination against women in economic participation (explained by changes in the coefficients gap), followed by changes in men's returns. The deterioration of women's socioeconomic conditions during the COVID-19 pandemic, particularly in terms of labor market participation, was the greatest contributor to the growth of intertemporal FI gender discrimination. Another contributor to the widening FI gender gap was the drop in income and employment during the pandemic, compounded by Israeli restrictions and rising political tension. Nonetheless, the gap narrows slightly over time among older individuals, indicating a positive trend for women’s FI across different age brackets. We find that household composition is pivotal in shaping the gender gap in FI, as the gap shrinks among households with a higher proportion of female members. Finally, adopting modern financial technologies may be slower among women facing barriers related to technology literacy or access to digital financial services; meanwhile, financial technology has a significant influence on the likelihood of FI, particularly favoring women.