Digital Financial Inclusion, Household Financial Participation and Well-Being: Micro-Evidence from China

ABSTRACT

Though financial inclusion has drawn a lot of attention lately, especially in emerging markets, it remains unclear how it affects household well-being. This study investigates the connection between digital financial inclusion (DFI) and household well-being using two databases in China. The findings suggest that DFI is positively associated with household well-being. Mechanism analysis reveals that a rise in DFI facilitates household financial participation, thereby increasing the probability of household well-being. Our further empirical analysis demonstrates that groups with lower education and income levels are more significantly affected by DFI regarding household well-being. Overall, the research provides empirical evidence for the assertion that expanding financial inclusion in the digital economy era can promote social fairness and provide a basis for a vigorous expansion of financial inclusion in emerging economies.

KEYWORDS:

• Digital financial inclusion
• household well-being
• household financial participation

JEL:

• D19
• G21
• R20

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. https://worldhappiness.report/.

2. https://chfs.swufe.edu.cn/.

3. https://idf.pku.edu.cn/zsbz/index.htm.

Additional information

Funding

This work was supported by the [Project of China National Social Science Foundation “Study on the vertical extension of labour division on the global value chain of Chinese FDI in manufacturing industry under the context of OBOR”] under Grant [number 20BJY189]; and [Project of China National Social Science Foundation “Research on the mechanism and policy of digital trade promoting the position of China’s global industrial chain”] under Grant [number 21BJY054].