Analysis of the impact of financial inclusion and FinTech on youth labour force participation in the MENA region

Authors

  • Hanane Elmasmari Faculty of Law, Economics, and Social Sciences, Cadi Ayyad University, Marrakech, Morocco https://orcid.org/0000-0002-2652-7156
  • Jabrane Amaghouss Faculty of Law, Economics, and Social Sciences, Cadi Ayyad University, Marrakech, Morocco

DOI:

https://doi.org/10.18559/ebr.2024.4.1668

Keywords:

Fintech, MENA, financial inclusion, labor force, youth, propensity score matching

Abstract

This study examines the determinants of financial inclusion and FinTech in order to evaluate their effects on youth labor force participation in the MENA region. The World Bank's Global Findex 2021 database was used to perform probit estimations and propensity score matching. The results show that young people with higher education levels, higher incomes, mobile phones and internet access are more likely to be included in the traditional and digital financial systems. In addition, the factors hindering financial inclusion include a lack of documentation, religious constraints and the costs associated with financial services. Furthermore, examining the effect of financial inclusion and fintech reveals that having formal bank accounts and mobile money accounts, as well as savings, formal loans, and digital transactions have a significant impact on young people's participation in the labor force.

JEL Classification

General (G50)
Labor Force and Employment, Size, and Structure (J21)
Financial Markets and Institutions (N2)

Downloads

Download data is not yet available.

References

Abadie, A., & Imbens, G. W. (2006). Large sample properties of matching estimators for average treatment effects. Econometrica, 74(1), 235–267. https://doi.org/10.1111/j.1468-0262.2006.00655.x DOI: https://doi.org/10.1111/j.1468-0262.2006.00655.x
View in Google Scholar

Abadie, A., & Imbens, G. W. (2012). A Martingale representation for matching estimators. Journal of the American Statistical Association, 107(498), 833–843. https://doi.org/10.1080/01621459.2012.682537 DOI: https://doi.org/10.1080/01621459.2012.682537
View in Google Scholar

Akileng, G., Lawino, G. M., & Nzibonera, E. (2018). Evaluation of determinants of financial inclusion in Uganda. Journal of Applied Finance and Banking, 8(4), 47–66.
View in Google Scholar

Alam, K., & Mamun, S. A. K. (2017). Access to broadband Internet and labour force outcomes: A case study of the Western Downs Region, Queensland. Telematics and Informatics, 34(4), 73–84. https://doi.org/10.1016/j.tele.2016.12.011 DOI: https://doi.org/10.1016/j.tele.2016.12.011
View in Google Scholar

Alikperova, N. Y. V., Yarasheva, A. V., & Vinogradova, K. V. (2019). Motivating young people’s labor behavior as an opportunity for implementing financial strategies. Economic and Social Changes: Facts, Trends, Forecast, 12(1), 226–240. https://doi.org/10.15838/esc.2019.1.61.14 DOI: https://doi.org/10.15838/esc.2019.1.61.14
View in Google Scholar

Ameme, B. K. (2015). The impact of customer demographic variables on the adoption and use of Internet banking in developing economies. Journal of Internet Banking and Commerce, 20(2), 1–30. https://doi.org/10.4172/1204-5357.1000114 DOI: https://doi.org/10.4172/1204-5357.1000114
View in Google Scholar

Antonijević, M., Ljumović, I., & Ivanović, D. (2022). Is there a gender gap in financial inclusion worldwide? Journal of Women’s Entrepreneurship and Education, 1-2, 79–96. https://library.ien.bg.ac.rs/index.php/jwee/article/view/1404/1231 DOI: https://doi.org/10.28934/jwee22.12.pp79-96
View in Google Scholar

Arcand, J. L., Dyer, P., Gonzalez, S. P., & Gardiner, D. (2013). MEDA Maroc’s 100 hours to success impact evaluation—baseline study. International Initiative for Impact Evaluation, MEDA and ILO.
View in Google Scholar

Aslan, G. (2019). Towards financial inclusion in South Asia: A youth and gender perspective. Development Papers, 1902. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office. https://www.unescap.org/sites/default/files/SSWA_Development%20Papers_1902.pdf
View in Google Scholar

Asuming, P. O., Osei-Agyei, L. G., & Mohammed, J. I. (2018). Financial inclusion in sub-Saharan Africa: Recent trends and determinants. Journal of African Business, 20(1), 112–134. https://doi.org/10.1080/15228916.2018.1484209 DOI: https://doi.org/10.1080/15228916.2018.1484209
View in Google Scholar

Babajić, A., Okičić, J., & Jukan, M. K. (2018). Identification of barriers to financial inclusion among youth. International Business Research, 11(7), 120–129. https://doi.org/10.5539/ibr.v11n7p120 DOI: https://doi.org/10.5539/ibr.v11n7p120
View in Google Scholar

Banerjee, A., Duflo, E., Glennerster, R., & Kinnan, C. (2015). The miracle of microfinance? Evidence from a randomized evaluation. American Economic Journal: Applied Economics, 7(1), 22–53. https://doi.org/10.1257/app.20130533 DOI: https://doi.org/10.1257/app.20130533
View in Google Scholar

Bekele, W. D. (2022). Determinants of financial inclusion: A comparative study of Kenya and Ethiopia. Journal of African Business, 24(2), 301–319. https://doi.org/10.1080/15228916.2022.2078938 DOI: https://doi.org/10.1080/15228916.2022.2078938
View in Google Scholar

Berguiga, I., & Adair, P. (2023). Determinants of youth financial inclusion in MENA countries: Account holding versus FinTech use. 2023 IEEE International Conference on Advances in Data-Driven Analytics and Intelligent Systems (ADACIS), 1–7. https://doi.org/10.1109/adacis59737.2023.10424294 DOI: https://doi.org/10.1109/ADACIS59737.2023.10424294
View in Google Scholar

Bessant, J., & Cook, S. (Eds.). (1998). Against the odds: Young people and work. Australian Clearinghouse for Youth Studies.
View in Google Scholar

Cámara, N., & Tuesta, D. (2014). Measuring financial inclusion: A muldimensional index. BBVA Research Paper, 14/26. DOI: https://doi.org/10.2139/ssrn.2634616
View in Google Scholar

Capasso, A., Rossi, M., Koloszar, L., & Festa, G. (2023). Potential impact of digital finance on small business lending: The ‘Fx12’ case study. In Business transformation in uncertain global environments (pp. 515–525). Proceedings of the 16th EuroMed Conference. EuroMed Press.
View in Google Scholar

Cho, Y., & Honorati, M. (2014). Entrepreneurship programs in developing countries: A meta regression analysis. Labour Economics, 28, 110–130. https://doi.org/10.1016/j.labeco.2014.03.011 DOI: https://doi.org/10.1016/j.labeco.2014.03.011
View in Google Scholar

Chowa, G., Masa, R., Ansong, D., Despard, M. R., Wu, S., Hughes, D., Osei-Akoto, I., Afranie, S., Mark-Sowah, N. A., Ofori-Acquah, C., Lee, Y., Johnson, L., & Sherraden, M. (2015). Impacts of financial inclusion on youth development: Findings from the Ghana youth save experiment. CSD Research Report, No. 15–35. Washington University, Center for Social Development. https://doi.org/10.7936/K7HQ3ZD7
View in Google Scholar

Claessens, S., & Perotti, E. (2007). Finance and inequality: Channels and evidence. Journal of Comparative Economics, 35(4), 748–773. https://doi.org/10.1016/j.jce.2007.07.002 DOI: https://doi.org/10.1016/j.jce.2007.07.002
View in Google Scholar

Dehejia, R. H., & Wahba, S. (2002). Propensity score-matching methods for nonexperimental causal studies. Review of Economics and Statistics, 84(1), 151–161. https://doi.org/10.1162/003465302317331982 DOI: https://doi.org/10.1162/003465302317331982
View in Google Scholar

Demirgüç-Kunt, A., Klapper, L., Singer, D., & Van Oudheusden, P. (2015). The Global Findex Database 2014: Measuring financial inclusion around the world. Policy Research Working Papers. World Bank Group. https://doi.org/10.1596/1813-9450-7255 DOI: https://doi.org/10.1596/1813-9450-7255
View in Google Scholar

Demirgüç-Kunt, A., & Singer, D. (2017). Financial inclusion and inclusive growth: A review of recent empirical evidence. World Bank Policy Research Working Paper, 8040. Denny, L., & Churchill, B. (2016). Youth employment in Australia: A comparative analysis of labour force participation by age group. Journal of Applied Youth Studies, 1(2), 5–22.
View in Google Scholar

DiPrete, T. A., & Gangl, M. (2004). Assessing bias in the estimation of causal effects: Rosenbaum bounds on matching estimators and instrumental variables estimation with imperfect instruments. Sociological Methodology, 34(1), 271–310. https://doi.org/10.1111/j.00811750.2004.00154.x DOI: https://doi.org/10.1111/j.0081-1750.2004.00154.x
View in Google Scholar

Elouaourti, Z., & Ibourk, A. (2024a). Empowering African entrepreneurs: The crucial role of financial inclusion in mediating the relationship between contextual factors and entrepreneurial willingness. Emerging Markets Review, 59, 101118. https://doi.org/10.1016/j.ememar.2024.101118 DOI: https://doi.org/10.1016/j.ememar.2024.101118
View in Google Scholar

Elouaourti, Z., & Ibourk, A. (2024b). Financial technologies for All MENA citizens: Tackling barriers and promoting inclusion. Regional Science Policy & Practice, 16(6), 100019. https://doi.org/10.1016/j.rspp.2024.100019 DOI: https://doi.org/10.1016/j.rspp.2024.100019
View in Google Scholar

Elouardighi, I., & Oubejja, K. (2023). Can digital financial inclusion promote women’s labor force participation? Microlevel evidence from Africa. International Journal of Financial Studies, 11(3), 87. https://doi.org/10.3390/ijfs11030087 DOI: https://doi.org/10.3390/ijfs11030087
View in Google Scholar

Evans, O. (2018). Connecting the poor: The Internet, mobile phones and financial inclusion in Africa. Digital Policy, Regulation and Governance, 20(6), 568–581. https://doi.org/10.1108/dprg-04-2018-0018 DOI: https://doi.org/10.1108/DPRG-04-2018-0018
View in Google Scholar

Ezzahid, E., & Elouaourti, Z. (2021). Financial inclusion, mobile banking, informal finance and financial exclusion: Micro-level evidence from Morocco. International Journal of Social Economics, 48(7), 1060–1086. https://doi.org/10.1108/ijse-11-2020-0747 DOI: https://doi.org/10.1108/IJSE-11-2020-0747
View in Google Scholar

Fanta, A., & Mutsonziwa, K. (2021). Financial literacy as a driver of financial inclusion in Kenya and Tanzania. Journal of Risk and Financial Management, 14(11), 561. https://doi.org/10.3390/jrfm14110561 DOI: https://doi.org/10.3390/jrfm14110561
View in Google Scholar

Gangani, D. J., & Raval, D. (2021). A study on level of digital financial inclusion among the urban youth of Gujarat. Elementary Education Online, 20(5), 4638–4647.
View in Google Scholar

Grimm, M., & Paffhausen, A. L. (2015). Do interventions targeted at micro-entrepreneurs and small and medium-sized firms create jobs? A systematic review of the evidence for low and middle income countries. Labour Economics, 32, 67–85. https://doi.org/10.1016/j.labeco.2015.01.003 DOI: https://doi.org/10.1016/j.labeco.2015.01.003
View in Google Scholar

Hasler, A., & Lusardi, A. (2017). The gender gap in financial literacy: A global perspective. Global Financial Literacy Excellence Center, The George Washington University School of Business.
View in Google Scholar

Heckman, J. J., Ichimura, H., & Todd, P. (1998). Matching as an econometric evaluation estimator. Review of Economic Studies, 65(2), 261–294. https://doi.org/10.1111/1467-937x.00044 DOI: https://doi.org/10.1111/1467-937X.00044
View in Google Scholar

ILO (International Labour Organization). (2024). Global employment trends for youth 2024: Decent work, brighter futures (20th anniversary edition). International Labour Office.
View in Google Scholar

Iyambo, T. O. (2020). The determinants of financial inclusion in the Khomas and Oshana Region, Namibia (published doctoral dissertation). University of Witwatersrand. Izzo, F., Baiocco, R., & Pistella, J. (2022). Children’s and adolescents’ happiness and family functioning: A systematic literature review. International Journal of Environmental Research and Public Health, 19(24), 16593. https://doi.org/10.3390/ijerph192416593 DOI: https://doi.org/10.3390/ijerph192416593
View in Google Scholar

Jann, B. (2017). Kernel matching with automatic bandwidth selection. London Stata Users Group meeting.
View in Google Scholar

Kazungu, K., & Njau, F. E. (2023). Determinants of youth financial inclusion and their willingness to become entrepreneurs in Tanzania. The Journal of Developing Areas, 57(3), 229–246. https://doi.org/10.1353/jda.2023.a907744 DOI: https://doi.org/10.1353/jda.2023.a907744
View in Google Scholar

Kede Ndouna, F., & Zogning, F. (2022). Financial inclusion and gender income inequalities in informal entrepreneurship: The case of Cameroon. The Journal of Entrepreneurial Finance, 24(3), 33–47. https://doi.org/10.57229/2373-1761.1443 DOI: https://doi.org/10.57229/2373-1761.1443
View in Google Scholar

Koloma, Y. (2021). Financial inclusion and entrepreneurship willingness of youth: Evidence from Mali. African Development Review, 33(2), 263–275. https://doi.org/10.1111/1467-8268.12539 DOI: https://doi.org/10.1111/1467-8268.12539
View in Google Scholar

Koomson, I., Martey, E., & Etwire, P. M. (2022). Mobile money and entrepreneurship in East Africa: The mediating roles of digital savings and access to digital cred- it. Information Technology & People, 36(3), 996–1019. https://doi.org/10.1108/itp-11-2021-0906 DOI: https://doi.org/10.1108/ITP-11-2021-0906
View in Google Scholar

Lecocq, A., Ammi, M., & Bellarbre, É. (2016). Le score de propension: Un guide méthodologique pour les recherches expérimentales et quasi expérimentales en éducation. Mesure et Évaluation en Éducation, 37(2), 69–100. https://doi.org/10.7202/1035914ar DOI: https://doi.org/10.7202/1035914ar
View in Google Scholar

Lee, J. N., Morduch, J., Ravindran, S., & Shonchoy, A. S. (2022). Narrowing the gender gap in mobile banking. Journal of Economic Behavior & Organization, 193, 276– 293. https://doi.org/10.1016/j.jebo.2021.10.005 DOI: https://doi.org/10.1016/j.jebo.2021.10.005
View in Google Scholar

Leyshon, A., & Thrift, N. (1995). Geographies of financial exclusion: Financial aban- donment in Britain and the United States. Transactions of the Institute of British Geographers, 20(3), 312–341. https://doi.org/10.2307/622654 DOI: https://doi.org/10.2307/622654
View in Google Scholar

Lyons, A. C., & Kass-Hanna, J. (2019). Financial inclusion, financial literacy and eco- nomically vulnerable populations in the Middle East and North Africa. Emerging Markets Finance and Trade, 57(9), 2699–2738. https://doi.org/10.1080/154049 6x.2019.1598370 DOI: https://doi.org/10.1080/1540496X.2019.1598370
View in Google Scholar

Lyons, A., & Contreras, S. (2017). A simultaneous model of youth entrepreneurship and financial inclusion across developing countries. https://doi.org/10.2139/ssrn.3053615 DOI: https://doi.org/10.2139/ssrn.3053615
View in Google Scholar

Markel, E., & Panetta, D. (2014). Youth savings groups, entrepreneurship and employment. Plan UK.
View in Google Scholar

MED Confederation. (2021). Advancing youth financial inclusion to boost job creation and growth in the Mediterranean region (Report No. 30). European Institute of the Mediterranean.
View in Google Scholar

Mossie, W. A. (2022). Understanding financial inclusion in Ethiopia. Cogent Economics & Finance, 10(1), 2071385. DOI: https://doi.org/10.1080/23322039.2022.2071385
View in Google Scholar

Ndoye, A., & Barajas, A. (2022). Financial inclusion. In R. Cardarelli, M. Vera-Martín, & S. Lall (Eds.), Promoting inclusive growth in the Middle East and North Africa: Challenges and opportunities in a post-pandemic world (Chapter 7). International Monetary Fund. https://doi.org/10.5089/9798400200038.071 DOI: https://doi.org/10.5089/9798400200038.071
View in Google Scholar

Ndungu, J. M., & Moturi, C. A. (2020). Determinants of mobile Fintech uptake in Kenyan microfinance sector. Current Journal of Applied Science and Technology, 39(28), 102–114. https://doi.org/10.9734/cjast/2020/v39i2830943 DOI: https://doi.org/10.9734/cjast/2020/v39i2830943
View in Google Scholar

Niaz, M. U. (2021). Socio-economic development and sustainable development goals: A roadmap from vulnerability to sustainability through financial inclusion. Economic Research-Ekonomska Istraživanja, 35(1), 3243–3275. https://doi.org/10.1080/1331677x.2021.1989319 DOI: https://doi.org/10.1080/1331677X.2021.1989319
View in Google Scholar

OECD. (2020). OECD/INFE 2020 international survey of adult financial literacy. OECD Publishing. https://doi.org/10.1787/145f5607-en. DOI: https://doi.org/10.1787/145f5607-en
View in Google Scholar

Onyekwere, E., Ogwueleka, F. N., & Irhebhude, M. E. (2023). Adoption and sustainability of bitcoin and the blockchain technology in Nigeria. International Journal of Information Technology, 15(5), 2793–2804. https://doi.org/10.1007/s41870-023-01336-1 DOI: https://doi.org/10.1007/s41870-023-01336-1
View in Google Scholar

Ozili, P. K. (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18(4), 329–340. https://doi.org/10.1016/j.bir.2017.12.003 DOI: https://doi.org/10.1016/j.bir.2017.12.003
View in Google Scholar

Özşuca, E. A. (2019). Gender gap in financial inclusion: Evidence from MENA. Economics and Business Letters, 8(4), 199–208. https://doi.org/10.17811/ebl. 8.4.2019.199-208 DOI: https://doi.org/10.17811/ebl.8.4.2019.199-208
View in Google Scholar

Pearce, D. (2011). Financial inclusion in the Middle East and North Africa: Analysis and roadmap recommendations. World Bank Policy Research Working Paper, 5610. DOI: https://doi.org/10.1596/1813-9450-5610
View in Google Scholar

Rosenbaum, P. R. (2002). Observational studies (2nd ed.). Springer. DOI: https://doi.org/10.1007/978-1-4757-3692-2
View in Google Scholar

Rosenbaum, P. R., & Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70(1), 41–55. https://doi.org/10.1093/biomet/70.1.41 DOI: https://doi.org/10.1093/biomet/70.1.41
View in Google Scholar

Sakanko, M. A., Yahaya, S. U., & Abdullahi, S. (2023). Financial literacy and financial inclusion. Zakariya Journal of Social Science, 2(1), 1–10. DOI: https://doi.org/10.59075/zjss.v2i1.227
View in Google Scholar

Sesabo, J. K., & Mkuna, E. (2024). Welfare impact of mobile financial services business among youth in urban and peri-urban Tanzania. Global Social Welfare. https://doi.org/10.1007/s40609-024-00339-5 DOI: https://doi.org/10.1007/s40609-024-00339-5
View in Google Scholar

Shen, Y., Hui, S. L., & Ping, X. L. (2023). The role of financial inclusion in achieving finance-related sustainable development goals (SDGs): A cross-country analysis. Economic Research-Ekonomska Istraživanja, 36(3), 2212028. https://doi.org/10.1080/1331677X.2023.2212028 DOI: https://doi.org/10.1080/1331677X.2023.2212028
View in Google Scholar

Stănescu, C. G., & Gikay, A. A. (Eds.). (2020). Discrimination, vulnerable consumers and financial inclusion: Fair access to financial services and the law. Routledge. https://doi.org/10.4324/9781003055075 DOI: https://doi.org/10.4324/9781003055075
View in Google Scholar

Sykes, J., Elder, S., Gurbuzer, Y., & Principi, M. (2016). Exploring the linkages between youth financial inclusion and job creation: Evidence from the ILO school-to-work transition surveys. Work4Youth Publication Series, 42.
View in Google Scholar

Triki, T., & Faye, I. (Eds.). (2013). Financial inclusion in Africa. African Development Bank.
View in Google Scholar

Vangvaidi, A. (2024). Finance inclusive et technologies de l’information et de la communication en Afrique. African Scientific Journal, 3(24). https://doi.org/10.5281/zenodo.12705474
View in Google Scholar

Williams, A. J., & Oumlil, B. (2015). College student financial capability: A framework for public policy, research and managerial action for financial exclusion prevention. International Journal of Bank Marketing, 33(5), 637–653. https://doi.org/10.1108/ijbm-06-2014-0081 DOI: https://doi.org/10.1108/IJBM-06-2014-0081
View in Google Scholar

Wilson, S. (2021). An exploration of the relationship between financial inclusion and the wellbeing of youth in South Africa. Faculty of Commerce, Graduate School of Business (GSB). https://hdl.handle.net/11427/35469
View in Google Scholar

World Bank Database. (2021). Unemployment, total (% of total labor force) (modelled ILO estimate). https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS
View in Google Scholar

World Bank Group. (2021). The global Findex database 2021: Financial inclusion, digital payments, and resilience in the age of COVID-19. https://www.worldbank.org/en/publication/globalfindex#sec5
View in Google Scholar

Xu, F., Zhang, X., & Zhou, D. (2023). Does digital financial inclusion reduce the risk of returning to poverty? Evidence from China. International Journal of Finance & Economics, 29(3), 2927–2949. https://doi.org/10.1002/ijfe.2812 DOI: https://doi.org/10.1002/ijfe.2812
View in Google Scholar

Zins, A., & Weill, L. (2016). The determinants of financial inclusion in Africa. Review of Development Finance, 6(1), 46–57. https://doi.org/10.1016/j.rdf.2016.05.001 DOI: https://doi.org/10.1016/j.rdf.2016.05.001
View in Google Scholar

Zupi, M., & Cerulli, G. (Eds.). (2020). Guide to the use of impact evaluation methods in Senegal. CeSPI – Centro Studi di Politica Internazionale. https://www.cespi.it/sites/default/files/allegati/valutazione/mz_cespi_guide_dutilisation_des_methodes_devaluation_dimpact_au_senegal_-_17_decembre_2020.pdf
View in Google Scholar

Downloads

Published

2024-11-28

Issue

Section

Research article- regular issue

How to Cite

Elmasmari, H., & Amaghouss, J. (2024). Analysis of the impact of financial inclusion and FinTech on youth labour force participation in the MENA region. Economics and Business Review, 10(4). https://doi.org/10.18559/ebr.2024.4.1668

Similar Articles

1-10 of 116

You may also start an advanced similarity search for this article.