The impact of financial technology, financial inclusion and the level of financial development on income inequality in countries around the world

Abstract

This research uses data from 157 countries in the period 2011-2022, divided into developed,
developing and underdeveloped country groups, to find out the relationship between financial technology ,
financial inclusion and the level of financial development to income inequality in these country groups. This
research uses panel data with three estimation models OLS, FEM and REM, then use F test, Breusch-Pagan
Lagrangian and Hausman test to select the appropriate model. To check the robustness of the model, the
research performed the Wald and Wooldridge tests, and finally adjusted the GLS model if defects existed
Research results show that, in developed countries, income inequality is strongly affected by the level of
financial development, financial technology and financial inclusion. For the group of developing countries,
financial development, saving at financial institutions significantly impact on income inequality. Meanwhile, in
underdeveloped countries, there are two factors of financial inclusion including the proportion of people with
accounts at financial institutions and the proportion of people borrowing from official financial institutions
significantly influence on income inequality