Does female labour force participation contribute to better financial inclusion? Evidence from cross-country analysis

Purpose - The purpose of this paper is to analyse the impact of female labour force participation (FLFP) in the access and usage of formal financial services by women. Design/methodology/approach - The study uses cross-country data from 107 countries. The study uses multivariate regression (OLS) to explain the impact of FLFP on the financial inclusion variables. The study also accounted for different groups of country-level control variables. Instrumental variables regression is also used in the study to consider for endogeneity issues. Findings - The results show that FLFP has significant influence on all of the financial inclusion variables used in the study. The role of financial literacy is prominent in determining women's access to sophisticated financial services such as debit card and credit card. Improving financial infrastructure of an economy facilitates greater access to formal account by women Practical implications - From policymakers’ perspective, women should be motivated to enter labour market for better financial inclusion. Social implications - More opportunities for women to enter formal employment encourages female participation in labour market and benefits women and the economy. Originality/value - This paper is the first of its kind to study the influence of FLFP on indicators of financial inclusion of women. The study extended the scope of access to financial services by considering access to bank account, debit card and credit card. The study also analysed use of financial services through digital platforms by women.