Threshold Effects of Financial Inclusion on Income Inequality

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Main author: Demir, Ayse
Other authors: Pesque-Cela, Vanesa
Murinde, Victor
Format: Monographs and Working Papers           
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id eprints-34154
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
topic HG Finance
description Economic theory predicts an indeterminate (positive or inverse) relationship between financial inclusion and income inequality. We invoke a panel threshold model to investigate the possibility of a non-linear relationship between financial inclusion and income inequality, covering 106 countries. Our results show that financial inclusion reduces income inequality, but only up to a point, beyond which it does not reduce, and may even increase, inequality. Moreover, the effects of financial inclusion on the distribution of income vary across heterogeneous financial services and across countries at different stages of economic development.
format Monographs and Working Papers
author Demir, Ayse
author_facet Demir, Ayse
Pesque-Cela, Vanesa
Murinde, Victor
authorStr Demir, Ayse
author_letter Demir, Ayse
author2 Pesque-Cela, Vanesa
Murinde, Victor
author2Str Pesque-Cela, Vanesa
Murinde, Victor
title Threshold Effects of Financial Inclusion on Income Inequality
publisher SOAS Centre for Global Finance Working Paper Series no. 2/2020
publishDate 2020
url https://eprints.soas.ac.uk/34154/

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