 Digital financial inclusion as a safety net: Empowering households against health shocksQingwen Xu, Chun Liu, Xingyu Gong, Xiang Ma and Ding Liu Economic Modelling, 2025, vol. 151, issue C Abstract: This study provides the first empirical evidence on how digital financial inclusion enables households to better smooth consumption following health shocks. Leveraging panel data from the China Family Panel Studies (2014–2020), we find that health shocks significantly increase medical expenses and reduce household income, leading to lower non-medical consumption. Digital financial inclusion—encompassing online transfers, digital lending, and mobile wealth management—substantially mitigates these negative effects by expanding informal risk-sharing and enhancing self-insurance, especially for households with limited access to traditional insurance. Our analysis further reveals that digital financial inclusion offers more effective consumption smoothing than traditional bank credit. These findings highlight the critical role of digital financial inclusion in strengthening household resilience, promoting economic stability, and advancing inclusive growth. Keywords: Health shocks; Consumption smoothing; Digital financial inclusion; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001890 DOI: 10.1016/j.econmod.2025.107194 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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