Effects of remittances on financial inclusion gender gap in developing countries

Remittances have a wide range of benefits to households and the economy at large. Evidence show that women are the major recipients of remittances in developing countries, consequently this may have the potential of reducing the gender gap in economic outcomes. This study examines the impact of remittances on gender gap in financial inclusion in developing countries. The dataset for the study was built from multiple sources. Based on data availability, the study covers 102 developing countries for three years, namely 2011, 2014 and 2017. The study employs fixed effects instrumental variable technique using the economic conditions of the top five remittance sending countries (proxied by their GDP per capita and employment rate) as instruments. For robustness purpose different measurements of remittances are used in the analysis. Though the study does not provide evidence that remittances impact the overall inequality in access to financial services, the results show that remittances significantly reduce the gender gap in financial inclusion in developing countries. Based on these findings, the study makes appropriate policy recommendations.