From digital wallets to social dividends: How digital financial inclusion drives household prosocial behavior in China

Shujin Zhu, He Chen and Yiding Tang

Economic Modelling, 2025, vol. 151, issue C

Abstract: This study examines how digital financial inclusion (DFI) triggers prosocial behavior, shifting focus from its well-documented economic impacts to its understudied societal implications. Using longitudinal data from the China Family Panel Studies and city-level DFI indices, we find a 1 % DFI increase raises household donations by 1.47 % via three channels: household financial gains, reduced inequality perceptions, and improved well-being. Geographic peer effects emerge, with prosociality clustering spatially but fading with distance. Married and older heads weaken this relationship: marital status prioritizes family needs over social giving, while older heads’ limited digital skills hinder DFI adoption. These results position DFI as a dual tool—boosting economic engagement while fostering social cohesion—but reveal demographic constraints on its societal benefits. The findings inform policies balancing financial inclusion with social cohesion in developing contexts.

Keywords: Digital financial inclusion; Prosocial preferences; Peer effect; Head of family (search for similar items in EconPapers)
JEL-codes: D64 D91 G29 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325002007

DOI: 10.1016/j.econmod.2025.107205

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