From digital wallets to social dividends: How digital financial inclusion drives household prosocial behavior in China

Abstract

This study examines how digital financial inclusion (DFI) triggers prosocial behavior, shifting focus from its well-documented economic impacts to its understudied societal implications. Using longitudinal data from the China Family Panel Studies and city-level DFI indices, we find a 1 % DFI increase raises household donations by 1.47 % via three channels: household financial gains, reduced inequality perceptions, and improved well-being. Geographic peer effects emerge, with prosociality clustering spatially but fading with distance. Married and older heads weaken this relationship: marital status prioritizes family needs over social giving, while older heads’ limited digital skills hinder DFI adoption. These results position DFI as a dual tool—boosting economic engagement while fostering social cohesion—but reveal demographic constraints on its societal benefits. The findings inform policies balancing financial inclusion with social cohesion in developing contexts.