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Does financial inclusion increase household resilience to natural disasters?

Author

Listed:
  • Nandini Gupta
  • Ashish K. Sedai

Abstract

Using a regression discontinuity design based on a bank expansion policy targeting under-banked districts in India, we study the causal impact of financial access on household resilience to natural disasters and climate shocks. Treated households experience lower consumption volatility and smaller disaster-induced declines in consumption growth, food consumption, and schooling. Following a disaster, they increase bank loan take-up, savings, and crop insurance, while reducing reliance on high-interest loans, and shift out of agriculture and migrate from affected regions.

Suggested Citation

  • Nandini Gupta & Ashish K. Sedai, 2026. "Does financial inclusion increase household resilience to natural disasters?," WIDER Working Paper Series wp-2026-111, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2026-111
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    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2026-111-financial-inclusion-household-resilience-natural-disasters.pdf
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    References listed on IDEAS

    as
    1. Tatyana Deryugina, 2017. "The Fiscal Cost of Hurricanes: Disaster Aid versus Social Insurance," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 168-198, August.
    2. Matias D. Cattaneo & Rocío Titiunik, 2022. "Regression Discontinuity Designs," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 821-851, August.
    3. Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June.
    4. Acharya, Viral & Das, Abhiman & Kulkarni, Nirupama & Mishra, Prachi & Prabhala, Nagpurnanand, 2022. "Deposit and Credit Reallocation in a Banking Panic: The Role of State-Owned Banks," CEPR Discussion Papers 17621, Centre for Economic Policy Research.
    5. Matias D. Cattaneo & Luke Keele & Rocio Titiunik, 2021. "Covariate Adjustment in Regression Discontinuity Designs," Papers 2110.08410, arXiv.org, revised Aug 2022.
    Full references (including those not matched with items on IDEAS)

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