The Impact of Financial Inclusion on Household Income: Micro Evidence for Chinese Households

Based on the perspective of Chinese residents' digital capability and financial literacy, this paper explores the impact of inclusive finance on household income level and the proportion of property income and the specific mechanism of the impact. Moreover, the micro survey data of China Household Finance Survey (CHFS) in 2011, 2013, 2015, 2017 and 2019 are used as samples for empirical test. The results show that the development of inclusive finance promotes the increase of household income and the proportion of property income, the improvement of digital ability promotes the increase of household income, and the improvement of financial literacy promotes the increase of household property income. The mechanism test finds that digital capability enhances the promoting effect of inclusive finance development on the increase of household income, and financial literacy enhances the promoting effect of inclusive finance development on the increase of household property income. The above research further enriches the research on inclusive finance and household income, and provides some policy implications for the consolidation of poverty alleviation achievements and the expansion of the proportion of property income in total household income.