Financial inclusion and multidimensional child poverty

Abstract

Despite the concerted efforts being made at the global, regional, and national levels to reduce child poverty, children in resource-poor countries continue to experience deprivations in multidimensional forms. This study examines the link between parental financial inclusion and multidimensional child poverty using a nationally representative living standards data from Ghana—a nation with documentative evidence of high incidence of multidimensional child poverty. Employing different variants of the propensity score matching technique and multidimensional constructs of financial inclusion and child poverty, our overall finding indicates that financial inclusion decreases multidimensional child poverty. This outcome is consistent across different cut-offs used in measuring multidimensional child poverty and alternative propensity score matching methods. We also find that financial inclusion reduces child poverty more for male and rural-located children. Relatively, financial inclusion has the biggest effect in reducing children’s deprivations in living conditions, followed by their health- and education-related deprivations respectively. Household income per capita and durable asset accumulation serve as potential pathways through which financial inclusion transmits to multidimensional child poverty.