Financial Inclusion, Shocks, and Poverty: Evidence from the Expansion of Mobile Money in Tanzania

We estimate the effect of mobile money adoption on consumption smoothing, poverty, and human capital investments in Tanzania. We exploit the rapid expansion of the mobile money agent network between 2010 and 2012 and use this together with idiosyncratic shocks from variation in rainfall over time an...

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Bibliographic Details
Published in:The Journal of human resources 2022-03, Vol.57 (2), p.435-464
Main Authors: Abiona, Olukorede, Koppensteiner, Martin Foureaux
Format: Article
Language:English
Subjects:
Capital investments
Consumption
Financial inclusion
Households
Human capital
Intergenerational transmission
Labor force participation
Money
Poverty
Rainfall
Time use
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Summary:We estimate the effect of mobile money adoption on consumption smoothing, poverty, and human capital investments in Tanzania. We exploit the rapid expansion of the mobile money agent network between 2010 and 2012 and use this together with idiosyncratic shocks from variation in rainfall over time and across space in a difference-in-difference framework. We find that adopter households are able to smooth consumption during periods of shocks and maintain their investments in human capital. Results on time use of children and labor force participation complement the findings on the important role of mobile money for the intergenerational transmission of poverty.
ISSN:0022-166X
1548-8004
DOI:10.3368/jhr.57.2.1018-9796r1