Financial Inclusion and Its Impact on Fertility: An Empirical Investigation

This paper explores the empirical relationship between financial inclusion and fertility, primary developmental outcomes. Some studies show the impact of financial inclusion on different developmental outcomes, such as poverty, inequality, education, health, empowerment and economic growth and development. However, only a few studies have analysed the impact of financial inclusion on specific health indicators. Financial inclusion has a significant impact on fertility decline. This study uses data from 2004 to 2018 from a panel of 152 countries from the World Development Indicators and the IMF’s Financial Access Survey to test the link between financial inclusion and fertility. I used techniques, that is, the panel fixed-effect model, SLM test, semi-parametric approach and quantile regression analysis, to understand the relationship between financial inclusion and fertility. The results suggest a non-linear relationship. As financial inclusion increases, fertility initially declines, but after reaching a critical point, the relationship turns positive, showing a U-shaped relationship. Other important variables that statistically influence fertility levels are levels of education, female labour-force participation rates, levels of urbanisation and age dependency. Inflation rate and trade openness also significantly influence fertility. This paper provides some policy implications concerning fertility and financial inclusion.