Financial Inclusion, Economic Development, and Inequality: Evidence from Brazil
Julia Fonseca and
Adrien Matray
Additional contact information
Julia Fonseca: University of Illinois at Urbana-Champaign
Adrien Matray: Princeton University, NBER, and CEPR
Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.
Abstract:
We study a financial inclusion policy targeting Brazilian cities with low bank branch coverage using data on the universe of employees from 2000–2014. The policy leads to bank entry and to similar increases in both deposits and lending. It also fosters entrepreneurship, employment, and wage growth, especially for cities initially in banking deserts. These gains are not shared equally and instead increase with workers’ education, implying a substantial increase in wage inequality. The changes in inequality are concentrated in cities where the initial supply of skilled workers is low, indicating that talent scarcity can drive how financial development affects inequality.
Keywords: Brazil; Financial Inclusion Policy; Wage Inequality; Banks (search for similar items in EconPapers)
JEL-codes: D63 E24 E58 G21 J30 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-des, nep-dev, nep-fle, nep-lam, nep-mfd, nep-pay and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://gceps.princeton.edu/wp-content/uploads/202 ... _Brazil_unbanked.pdf
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:308
Access Statistics for this paper
More papers in Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies. Contact information at EDIRC.
Bibliographic data for series maintained by Bobray Bordelon (bordelon@princeton.edu).