Financial Inclusion and Poverty Reduction: An Analysis of Panel Data 2010-2019

The purpose of this research paper is to determine the contribution of financial inclusion on the reduction of poverty. Peru was used as a case study to analyze the policy process in reduction of poverty through financial inclusion using data for the period of 2010-2019. The general research hypothesis is that financial inclusion can contribute to the reduction of poverty. Panel data model was specified whose estimation was made through the fixed effects estimator.Within the specified econometric model, the dependent variable was the poverty rate, while the explanatory variable of interest, in this case, financial inclusion, was measured through a multidimensional index of financial inclusion. Additionally, a set of control variables was incorporated: economic growth, income inequality, labor informality rate, and average number of years of education achieved.The results of the research demonstrate evidence in favor of the general research hypothesis, confirming that financial inclusion presents a statistically significant contribution of 1% on the reduction of poverty in Peru during the period 2010-2019. Likewise, regarding the control variables, it is identified that the increase in the levels of economic growth and average years of education are also relevant for the reduction of poverty. Additionally, it is corroborated that the reduction of the levels of income inequality and labor informality lead to an improvement in reduction of the poverty rates

Inclusión financiera y pobreza en el Perú, 2010 - 2019

El presente trabajo de investigación tuvo como objetivo general determinar la contribución de la inclusión financiera sobre la reducción de la pobreza en los departamentos del Perú durante el período 2010 – 2019, siendo la hipótesis general de investigación si la inclusión financiera ha contribuido en la reducción de la pobreza en los departamentos del Perú durante el período 2010 – 2019. Para el contraste de hipótesis se utilizó un modelo de datos de panel cuya estimación se realizó a través del estimador de efectos fijos. La variable dependiente del modelo fue la tasa de pobreza, mientras que, la variable explicativa fue el índice multidimensional de inclusión financiera. Adicionalmente, se incorporó un conjunto de variables de control: crecimiento económico, desigualdad económica, tasa de informalidad laboral y número de años promedio de educación alcanzado. Los resultados de la investigación muestran evidencia a favor de la hipótesis general de investigación, confirmándose que la inclusión financiera ha contribuido en la reducción de la pobreza de los departamentos del Perú durante el período 2010-2019 a un nivel de significancia del 1%. Respecto a las variables de control, se identifica que el incremento de los niveles de crecimiento económico y años de educación promedio son también relevantes para la reducción de la pobreza.The main objective of this research work is to determine the contribution of financial inclusion on the reduction of poverty in the departments of Peru during the period 2010 - 2019, being the central research hypothesis whether financial inclusion has contributed to the reduction of poverty in the departments of Peru during the period 2010 - 2019. For purposes of contrasting this hypothesis, an econometric panel data model was used, the estimation of which was made through the fixed effects estimator, the dependent variable being the poverty rate and the central explanatory variable being the multidimensional index of financial inclusion. Additionally, a set of control variables was incorporated: economic growth, economic inequality, labor informality rate, and average number of years of education per individual. The results of the research show evidence in favor of the central research hypothesis, confirming that financial inclusion has contributed to the reduction of poverty in the departments of Peru during the period 2010-2019 at a significance level of 1%. Regarding the control variables, it is identified that the increase in the levels of economic growth and the average years of education are also relevant for the reduction of poverty. Regarding inequality and labor informality, it is verified that these variables have a direct relationship with the poverty rate. Finally, in terms of the inverse relationship with the poverty rate, according to order of importance, the years of average education, financial inclusion and economic growth stand out. On the other hand, in terms of direct relationship according to import order, inequality and labor informality stand out.Tesi