Financial Inclusion and Income Inequality in Mexican Municipalities

José Salazar-Cantú^1*, Juvencio Jaramillo-Garza², Bethzaira Álvarez-De la Rosa³

¹Economics Department, Tecnologico de Monterrey, Monterrey, México.
²Facultad de Ingeniería Mecánica y Eléctrica (FIME), Universidad Autonoma de Nuevo Leon, San Nicolás de los Garza, México.
³Universidad Juarez Autonoma de Tabasco, Villahermosa, México.

DOI: 10.4236/jss.2015.312004                

Abstract

The Greenwood and Jovanovic (1990) [1], hypothesis, about the influence of the financial inclusion on the inequality in the income distribution, is tested for the Mexican municipalities. The results of the econometric estimation, confirm the theoretical expectative, indicating that a higher financial inclusion would lead initially to a greater income inequality within the Mexican municipalities, so that later on as the inclusion continues growing that inequality reduces. These findings, obtained through the use of regional information for a same country, are the first of its kind on available literature; and suggest the need for more regional approaches, rather than national, in the public policy on the complex social problem of income inequality.

Keywords

Income Inequality, Financial Inclusion, Social Cohesion, Mexican Municipalities

Conflicts of Interest

The authors declare no conflicts of interest.

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