Who needs cash? Digital finance and income inequality

This article analyzes the role of access to digital and physical forms of finance on income inequality. The article develops a new measure of financial access that captures the relationship between digital finance and inequality, using a dynamic panel data analysis on 116 countries between 2001 and 2019. The results indicate that access to both financial institutions and digital access may reduce inequality, suggesting that they are complementary. We also find evidence suggesting that, in emerging economies, access to digital financial is more relevant than physical access.