nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒01‒15
one paper chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Financial Inclusion: New Measurement and Cross-Country Impact Assessment By Cyn-Young Park; Rogelio Mercado Jr.

  1. By: Cyn-Young Park (Asian Development Bank); Rogelio Mercado Jr. (South East Asian Central Banks (SEACEN) Research and Training Centre)
    Abstract: This paper introduces a new index of financial inclusion for 151 economies using principal component analysis to compute weights for aggregating 9 indicators of access, availability, and usage. It then assesses the impact of financial inclusion on poverty and income inequality. The results provide evidence that high and middle-high-income economies with high financial inclusion have significantly lower poverty, while no such relation exists for middle-low and low-income economies. The nonlinearities in the cross-country determinants and impacts of financial inclusion on poverty and income inequality across income groups are important to choosing the appropriate policies for achieving inclusive growth in different development stages.
    Keywords: financial inclusion, poverty, income inequality
    JEL: G18 O11 O16
    Date: 2018–01

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