The Effect of Financial Inclusion on Household Wealth in Vietnam: Do Female-Headed Households Benefit More?

Financial inclusion is increasingly recognized as a vital instrument for promoting economic development and reducing inequality, especially in low- and middle-income countries. Yet, there is limited research on the relationship between financial inclusion and wealth accumulation, especially in developing countries like Vietnam. The moderating role of gender in this relationship is also underexplored. As such, this study examines the effect of financial inclusion on wealth accumulation and the moderating role of the gender of the household head, using the latest data from the Vietnam Household Living Standards Surveys (VHLSS). We address potential endogeneity issues by employing Lewbel’s instrumental variable estimation method. We find that financial inclusion significantly and positively influences household wealth. Moreover, the gender of the household head significantly moderates this relationship, with female-headed households experiencing greater benefits from financial inclusion in wealth accumulation compared to male-headed households. We also find that household income is a mediating channel through which financial inclusion enhances household wealth. This paper contributes to the literature by providing causal evidence on the impact of financial inclusion on household wealth in a Global South context and highlighting gender heterogeneity in this relationship. Policy implications stemming from these findings are discussed.