Gender gap in financial inclusion and the role of de jure discrimination against women

Purpose Despite recent improvements in educational achievements and earnings of women, substantial gender gaps in financial inclusion persist. This study aims to examine the causal effect of de jure gendered laws on the gender gap in financial inclusion. The author conducts this study in the context of the existing literature, revealing that higher levels of de jure gender inequality are linked to greater difficulties for women in acquiring, controlling or inheriting wealth and property, which in turn leads to a wider gender gap in terms of opportunities and outcomes. Design/methodology/approach This study is based on a sample from 156 countries spread over four survey waves and uses panel data estimation models, probit models, instrumental variable methods and difference-in-difference methods. Findings Legal discrimination against women causes gender gap in financial inclusion. The countries where legal systems do not prohibit gender discrimination in credit access and employment, and where, women cannot open a bank account, go outside alone, get a job and get their business registered like men can, the gender gaps in the availability and utilization of financial services are wider. The findings are robust after accounting for macro and micro level characteristics, continent and year fixed effects and using women’s economic rights as an alternative marker of legal discrimination. Practical implications These findings highlight the importance of legal reforms aimed at eliminating gender-based discrimination as a prerequisite for closing the gender gap in financial inclusion. This suggests that efforts to expand female financial inclusion must be complemented by broader institutional changes that enhance women’s legal and economic rights. Originality/value This paper adopts a micro and macro-level perspective to examine the gender gap in financial inclusion. It places stronger emphasis on identifying causal relationships.