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Do financial inclusion and income inequality matter for human capital? Evidence from sub-Saharan economies

  • Wenjing Huang
  • , Xinyu Gu*
  • , Linting Lin
  • , Majed Alharthi
  • , Muhammad Usman
  • *Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

43 Scopus citations

Abstract

Sub-Saharan African (SSA) countries are struggling as they have a lower level of human capital than developed countries. These economies are also trying to develop their financial sector with improved products and services. The main cause of their slow development in this region is income disparity. In view of this potential problem, this study examines the impact of financial inclusion and income inequality on human capital in SSA countries. To test this, we use panel data from 36 SSA from 2004 to 2019. Controlling for other economic indicators, we find that a high level of financial inclusion and a reduction in income inequality improve human capital. Then, we test this association separately for the dimension of financial inclusion. Afterward, our study uses the GMM technique to address endogeneity concerns. Additional tests confirm that our results are robust when SSA economies have a high level of education.

Original languageEnglish
Pages (from-to)22-33
Number of pages12
JournalBorsa Istanbul Review
Volume23
Issue number1
DOIs
StatePublished - Jan 2023
Externally publishedYes

Bibliographical note

Publisher Copyright:
© 2022 Borsa İstanbul Anonim Åžirketi

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 1 - No Poverty
    SDG 1 No Poverty
  2. SDG 8 - Decent Work and Economic Growth
    SDG 8 Decent Work and Economic Growth
  3. SDG 10 - Reduced Inequalities
    SDG 10 Reduced Inequalities

Keywords

  • Education
  • Financial inclusion
  • Human capital
  • Income inequality
  • Sub-Saharan African countries

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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