Research on the Impact of Digital Inclusive Finance on the Financial Vulnerability of Aging Families

Abstract

In recent years, the issue of population aging has been a challenge for China’s economic and social development. Due to factors such as the imperfect pension security system, the financial vulnerability of families has been greatly impacted by population aging. Digital inclusive finance is a financial model that utilizes digital technology and innovative approaches to provide financial services to low-income groups and impoverished areas. With the rapid development of the concept of digital inclusive finance, an increasing number of households are beginning to use digital inclusive finance products. It is worth exploring whether this financial model can help alleviate the financial vulnerability of aging families. Therefore, it is of both theoretical and practical significance to study the role of digital inclusive finance in improving the financial vulnerability of aging families. This study assembled unbalanced panel data using both 2016 and 2018 China Household Tracking Survey (CFPS) data and the digital financial inclusion index. An empirical analysis was conducted using the ordered probit panel model. The research findings indicate the following: First, the increasing elderly population intensifies the financial vulnerability of families. Second, digital inclusive finance plays a significant role in improving the financial stability of aging families. Third, digital inclusive finance helps alleviate the impact of population aging on family financial vulnerability by mitigating credit constraints and increasing household income. Fourth, a heterogeneity analysis suggests that in female-headed households, the financial vulnerability caused by population aging is more severe, and the role of digital inclusive finance in improving family financial vulnerability is more prominent. Additionally, the purchase of commercial insurance can effectively alleviate the financial vulnerability of families caused by population aging.