Effect of Financial Inclusion on Income Inequality in ASEAN Countries
DOI:
https://doi.org/10.55164/ecbajournal.v18i3.277620Keywords:
Financial Inclusion, Income Inequality, ASEANAbstract
The purposes of this research are to: 1) Examine the impact of financial inclusion in financial institutions on income inequality in ASEAN countries. 2) Examine the impact of financial inclusion in financial markets on income inequality in ASEAN countries. The study used secondary data from 10 ASEAN countries from 2007 to 2021. The findings from the Panel Data Regression analysis indicate that financial inclusion in the bond market increases income inequality, whereas financial inclusion in the capital market does not have a significant impact on income inequality. Additionally, financial inclusion in financial institutions initially leads to increased inequality but can contribute to a reduction in the long run. Moreover, economic conditions, inflation rates, export of goods and services, healthcare services, and access to electricity are found to reduce income inequality. In contrast, unemployment rates and education contribute to an increase in income inequality. The findings provide a clearer understanding of the impact of financial inclusion on income inequality in ASEAN countries, both in terms of financial institutions and financial markets. Additionally, the findings will provide useful policy implications for policymakers in ASEAN countries in formulating policies to reduce income inequality.
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