Financial Inclusion, Household Poverty and Vulnerability
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| Title | Financial Inclusion, Household Poverty and Vulnerability
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| Author | Yin Zhichao and Zhang Donghao |
| Organization | The School of Finance, Capital University of Economics and Business; Research Institute of Economics and Management, Southwestern University of Finance and Economics |
| Email | yzc@cueb.edu.cn；zdhfinancial@126.com |
| Key Words | Financial Inclusion; Poverty; Vulnerability; Targeted Poverty Alleviation |
| Abstract | Using 2015 China Household Finance Survey（CHFS）data, the paper investigates the effect of financial inclusion on households’ poverty and vulnerability. Based on the household financial inclusion index constructed by the factor analysis method, we find financial inclusion can significantly decrease probabilities of poverty and vulnerability. Financial inclusion plays a timely role in poverty alleviation, helps to promote its accuracy, and has a larger effect on vulnerabilities originated from household and community shocks. Moreover, the negative impact of financial inclusion also holds at the community level, and the financial inclusion of the community can decrease the adverse effect of income gap during the poverty reduction. Finally, we find financial inclusion can reduce households’ poverty and vulnerability through increasing human capital investment, promoting entrepreneurship, smoothing household consumption, training the awareness of financial investment, and selecting the formal credit channel. |
| Serial Number | WP1241 |
| Time | 2017-11-30 |
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