Does financial inclusion increase household resilience to natural disasters?

Nandini Gupta and Ashish K. Sedai

No wp-2026-111, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Using a regression discontinuity design based on a bank expansion policy targeting under-banked districts in India, we study the causal impact of financial access on household resilience to natural disasters and climate shocks. Treated households experience lower consumption volatility and smaller disaster-induced declines in consumption growth, food consumption, and schooling. Following a disaster, they increase bank loan take-up, savings, and crop insurance, while reducing reliance on high-interest loans, and shift out of agriculture and migrate from affected regions.

Keywords: Natural disasters; Financial inclusion; Deregulation; Regression discontinuity (search for similar items in EconPapers)
Date: 2026
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