Financial inclusion as a pathway to welfare enhancement and income equality: Micro-level evidence from Nigeria

While the importance of financial inclusion as a means of poverty and income inequality reduction has long been recognised, the paths to welfare enhancement and income equality through financial inclusion remain partially acknowledged. Using micro-level data on 1 750 rural Nigerian households, this study examines the finance-welfare nexus by constructing a multi-variable financial inclusion index. The results first show that financial inclusion exerts a strong positive influence on household welfare. However, the decomposition analysis shows that middle- and high-income households gain more from financial inclusion in comparison to the targeted low-income households. Second, informal livelihood strategies, such as environmental resource extraction, crops, and livestock production, revealed reduced welfare disparities across income distributions. Therefore, for financial inclusion to alleviate welfare inequality and ensure income convergence, rural financial markets must be redesigned to allow wider access to credit, specifically for low-income and vulnerable households.     

数字普惠金融的创业效应与收入不平等:数字鸿沟还是数字红利？

数字普惠金融与实体经济之间的关系受到学界广泛关注,但其究竟是普惠的数字红利还是金融领域的数字鸿沟,这是数字普惠金融快速发展中亟需回答的重要理论与现实问题。文章通过匹配宏观统计数据和微观调查数据,实证研究了数字普惠金融的发展对收入不平等的影响,并从创业效应这一渠道进行了机制分析。研究发现：数字普惠金融的发展总体上改善了收入不平等状况,而数字普惠金融的创业效应是影响收入不平等的重要渠道之一。进一步的中介效应分析表明,数字普惠金融的创业效应对收入不平等的影响存在异质性：数字普惠金融通过促进生存型创业从而改善了收入不平等,而数字普惠金融对机会型创业的促进却在一定程度上扩大了收入不平等。文章的研究结论对于理解数字普惠金融发展的正外部性以及如何缓解收入不平等提供了新的视角。     

Income inequality and access to housing: Evidence from China

Economic theory suggests that income inequality predicts housing price and housing affordability for low-income households. Employing Chinese urban household survey data, this paper examines empirically the relationship between income inequality and access to housing for urban low-income households. The empirical results demonstrate that higher income inequality within cities is significantly related to a higher housing cost burden, a smaller per capita living space, and lower housing quality for low-income households. Further studies demonstrate that the negative impacts of income inequality could be moderated by product differentiation in housing markets, as a higher degree of differentiation in the size of housing units corresponds to a smaller effect of income inequality on housing affordability.     

E-commerce and Consumption Inequality in China

Consumption inequality may impede economic development and hinder the achievement of common prosperity. Using three waves of the China Family Panel Studies from 2014 to 2018, this paper investigated the impact of e-commerce on consumption inequality, as measured by the Kakwani index. The results indicate that e-commerce can reduce household consumption inequality. A mechanism analysis shows that e-commerce can narrow household income inequality, increase the purchasing power of low-income households, and promote the consumption of households with limited access to offline markets, thereby reducing the consumption gap. A heterogeneity analysis suggests that the positive role of e-commerce in reducing consumption inequality can be more significant among vulnerable households, such as households with elderly members and less-educated households. E-commerce can have varying impacts on consumption inequality across different subcategories of household expenditure, with the greatest impact seen in entertainment and education expenditure. These findings provide new evidence for the role of e-commerce in reducing consumption inequality in the digital economy, and the implications of this are discussed.     

Trade openness and income inequality in China and the SAARC Region

The paper empirically examines the effects of trade liberalisation on income inequality in China and the South Asian Association for Regional Cooperation countries. Panel data analysis is conducted for the period of 1973 to 2012. The results show that liberal trade policies have increased income inequality in these countries. These results are robust to alternative liberalisation measures. The control variables used have differing effects on income distribution. Per capita income has an increasing effect on income inequality, while education, financial development, financial openness, democracy, and government size are shown to reduce income inequality. These outcomes can be expected to have important policy implications for the use of trade liberalisation in these countries.     

The role of public pensions in income inequality among elderly households in China 1988–2013

Using data from the Chinese Household Income Project surveys for 1988, 1995, 2002 and 2013, we investigate the role of public pensions in income inequality among households with elderly members across two decades of pension policy reforms. We examine the distribution and role of public pensions at a national level and analyse the evolution of the contribution of public pensions to national income inequality across a much more extended time period than earlier studies, which have generally focused on regional changes over short periods. Our findings suggest that public pensions have become the most important source of income for households with elderly members on average in China, but the distribution of pension income is highly unequal, with a Gini coefficient of 0.74 in 2013. Public pension income has been the largest source of income inequality for elderly households since 2002 and contributed to more than half of total income inequality in the most recent year of the survey. This finding is robust against variations in the income inequality measures used. Additionally, our analysis suggests unequal distribution of pension benefits is the primary driver of pensioners' income inequality. Among several hypothetical policy changes, ensuring a minimum pension benefit for all existing pensioners seems to be the most fiscally effective option in reducing income inequality, with a 0.8% reduction in the Gini coefficient for a 1% increase in public pension expenditure.     

Intergenerational Transfers and Asset Inequality in Japan: Empirical Evidence from New Survey Data

This paper quantitatively examines the impact of intergenerational transfers on asset inequality among Japanese households. We estimate an intergenerational asset transfer function with various control variables, using a unique micro dataset taken from a survey conducted by the Economic and Social Research Institute, Cabinet Office. Employing three different models, a Tobit model, an interval regression model and an ordered probit model, to ensure that our results are independent of the specific econometric approach used, we investigate whether asset transfers received are correlated with households’ financial strength. We find that higher income households are likely to receive larger asset transfers. However, the contribution of intergenerational transfers to asset inequality appears to be small.     

数字金融、家庭财富与共同富裕

文章使用2017年中国家庭金融调查(CHFS)数据,实证研究了数字金融对家庭财富积累、财富不平等的影响。研究发现:(1)在考虑了内生性问题的影响后,数字金融能够显著促进家庭财富积累,经过使用多种方法进行稳健性检验,该结论依然成立。(2)创业和配置风险金融资产是数字金融影响家庭财富的重要渠道。(3)财富规模越小的家庭,使用数字金融产生的创富作用越大,并且老年人、低教育程度、低收入水平、农业户口群体家庭和农村居民家庭使用数字金融能够产生更大的创富作用。总的来说,财富是富裕的题中之义,数字金融能够在提升家庭财富总体水平的基础上缓解财富不平等,从而有利于实现共同富裕。文章的研究发现为推动共同富裕提供了政策参考依据。     

金融普惠可以提高减贫质量吗?——基于多维贫困的分析

切实提高减贫质量对我国打赢打好脱贫攻坚战和守住脱贫成果至关重要。金融普惠作为当前我国金融改革和脱贫攻坚的重要举措,是否有助于提高减贫质量仍是有待回答的问题。文章基于中国家庭金融调查2015年数据,从多维贫困和多维贫困脆弱性两方面出发研究了金融普惠对我国农村减贫质量的影响。研究发现,金融普惠可以同时降低农村家庭多维贫困和多维贫困脆弱性,并且对多维贫困问题严重的农村家庭有更大的作用;区分不同贫困和不同金融服务发现,金融普惠可以显著降低收入贫困、教育贫困及生活质量贫困,对健康贫困的影响则不显著;银行营业网点与金融服务点渗透、以及储蓄、贷款、保险及数字金融服务使用可以提高减贫质量,而其他金融机构渗透、信用卡使用及银行服务评价的作用相对有限。进一步地,文章研究了金融普惠减贫质量效应的环境条件,发现村庄市场及制度环境和家庭需求环境改善有助于充分发挥金融普惠的积极作用,相反则可能构成一定的制约。最后,文章检验了金融普惠的影响机制,发现促进农村家庭人力与物质资本积累、以及地区经济发展等在其中发挥了重要的中介作用。文章结论为我国提高减贫质量提供了可靠的政策工具,同时也可促进我国全面建成小康社会和经济实现高质量发展。     

Digital Financial Inclusion and Consumption Smoothing in China

In this paper, we investigate the effect of digital financial inclusion (DFI) on household consumption smoothing in China. We use four waves of the biennial China Family Panel Studies from 2010 to 2016, during which time DFI has significantly developed alongside financial technology across China. We split household income shocks into permanent and transitory components, and evaluate if DFI may help households to buffer against these shocks. We find that households are not able to insure against permanent shocks to income, but they can smooth approximately 70 percent of transitory shocks to income. We also find that DFI has diminished households’ ability to insure against transitory income shocks. This is partly because online purchase may lead to the oversensitivity of consumption to income. In addition, we find that contrary to DFI, traditional financial sector development contributes to better household consumption smoothing against transitory income shocks.     

Preferential policies and income inequality: Evidence from Special Economic Zones and Open Cities in China

This paper examines whether cities with preferential policies have higher inequality in household disposable income per capita than cities without preferential policies in urban China. “Preferential policies” refers to the autonomy and deregulation given to Special Economic Zones (SEZs) and Open Cities, allowing them to experiment with market policies and reforms, as the country moves from a state-controlled economy towards a market-oriented economy. While the effect of these policies on economic growth is extensively documented, their relationship with income inequality remains undetermined. Subgroup decompositions of income inequality, using the China Household Income Project's urban datasets of over 6000 households and 20,000 individuals from of up to 70 cities from 12 provinces, were used to identify income inequality gaps between cities with and without preferential policies. The results reveal that while income inequality increased in urban China from 1988 to 2007, the change was lower for cities awarded preferential policies across regions. Furthermore, the decompositions by region indicate that cities receiving preferential policy treatment had higher income growth but a lesser increase in income inequality than cities without preferential policies in each region. Finally, cities receiving preferential policies were able to increase the share of income of the poorest 40% of households while reducing the share of the richest 10%.     

When More Poor Means Less Poverty: On Income Inequality and Purchasing Power

We show theoretically that the poor can benefit from price changes induced by higher income inequality. As the number of poor increases, the market for products aimed toward the poor grows, and such products become more profitable. As a result, there are circumstances where an increase in income inequality associates with higher purchasing power of the poor. Using cross‐country data on the price of one kilogram of rice and the price of a Big Mac hamburger, we confirm a negative association between income inequality and the price of inferior goods, robust to the inclusion of a large set of control variables. Results are also robust to a first difference specification and to a two‐stage instrumental variables approach. Examining economic well‐being, it is thus important to analyze not only the incomes of households, but also the prices of the products and services that they buy.     

数字普惠金融对家庭消费借贷的影响研究——基于金融素养的调节效应

基于中国家庭金融调查（CHFS）2015年、2017年和2019年三期面板数据探讨数字普惠金融与家庭消费借贷之间的关系。研究表明,数字普惠金融对家庭消费借贷具有扩张效应,其中对低层次消费借贷扩张效应更强,金融素养提高能强化数字普惠金融对消费借贷的扩张效应。分数字普惠金融子维度来看,数字普惠金融对消费借贷的扩张效应主要源于覆盖广度和使用深度的提高,数字化程度作用较小。异质性分析发现,数字普惠金融对消费借贷的扩张效应对“长尾”群体更显著,即对农村和中西部家庭消费借贷具有更强的扩张效应。另外,该扩张效应存在工具门槛及知识门槛,拥有智能手机及高学历的家庭更容易获得消费借贷。     

Finance and Inequality: The Case of India

Although theory emphasizes the role of financial market frictions in explaining income inequality, there is little empirical research exploring how financial development and financial sector reforms influence the evolution of income inequality. This article examines how finance impacts income inequality in India using annual time series data for over half a century. The results indicate that while financial development helps reduce income inequality, financial liberalization seems to exacerbate it. The results are robust to the use of different measures for financial development and financial liberalization.     

Income Uncertainty and Wealth Accumulation: How Precautionary are Taiwanese Households?*

To assess how recent job loss impacts wealth accumulation of Taiwanese households, the present study investigates the empirical relevance of the precautionary saving motive to explain measures of wealth during the past 2 decades. This study demonstrates that households facing increased transitory shock accumulate increased amounts of financial and housing wealth, whereas permanent shocks cause households to accumulate housing wealth only. Empirical results suggest an important policy implication: households in Taiwan will save less when social insurance policies are effective in reducing future transitory and permanent shocks to household income.     

A decomposition analysis of income inequality of Chinese rural households

This paper reports an application of household survey data collected from grain producing areas in five provinces of China to issues of the determinants of rural inequality. Previous studies suggest that non-agricultural activities have been the major cause of rural income inequality, which has important implications for policy formulation. However, our results show that inequality within the grain producing areas was also very high, with differences in crop income as the major source of inequality. The policy implications are also different from those of previous studies. While some suggest that an increase in agricultural income can reduce inequality, our results indicate that this is not universally true. In some cases, whether the increase in crop income has come from state procurement also matters. These results call for a more cautious and area-specific approach to policy formulation as far as inequality is concerned.     

INCOME INEQUALITY IN THE PHILIPPINES, 1961–91

Household income inequality in the Philippines remains high and the trends for three decades have been fairly stable except for a sharp decline in the mid-1980s. Gini coefficient of income inequality has been consistently close to 0.50. Urbanization and education of household head are the most important factors determining the level of income inequality while the contribution of age of head is limited. The increase in the number of urban households results in an increase of overall inequality while the increase in the number of household heads with a college education tends to decrease the inequality. Among the household income sources, wage income is the largest contributor to total income inequality. Wage rate inequality appears to be a major source of wage income inequality.     

信贷约束下的农村金融与农村收入分配关系研究

文章建立了一个简单的两期生命周期模型来考察在信贷约束下农村金融与农村收入分配不平等的作用机制。模型结论表明,在存在农村信贷约束的情况下,农村金融的发展能否起到缩小农村居民贫富差距的作用,主要取决于农业投资回报率、农村金融贷款利率和农户进入农村金融市场的成本对比：在其他条件不变的情况下,受农村金融支持的农业投资回报率越高,农村金融贷款利率越低,农户进入农村金融市场的成本越低,则农村金融的发展越有利于缩小农村居民的贫富差距。     

Is income a good welfare indicator for Spanish households? A comparison between both distributions

This paper compares the income and welfare distributions of Spanish households, with the objective of determining whether the first is a good indicator of the second. We consider different inequality measures of both adjusted income and welfare. The results show that the income ranking does not represent the welfare ranking of households and, secondly, that monetary inequality is higher than welfare inequality, which gives support to the idea that leisure time has a compensating effect on household welfare.     

Decomposing inequality and poverty in post-war Rwanda: The roles of gender,education, wealth and location

This paper provides an overview of poverty and inequality in post-war Rwanda. Rwanda is one of the poorest countries in the world, and has recently become one of the most unequal. High levels of poverty and inequality have important implications not only in terms of evaluations of social welfare, but also for management of social tensions and the propensity for violent conflict in the future. This paper uses the first two available and nationally representative rounds of household surveys –EICV1 2000 and EICV2 2005 – to decompose and identify the major ‘sources' of poverty and inequality in the country. I find stark differences in vulnerability to poverty by region, gender and widow status of the head of household. I additionally find important changes in the ‘income generating functions' of Rwandan households, and that distribution of land and financial assets are increasingly important in determining the inter-household distribution of income.