Availability of financial services and income inequality: The evidence from many countries

Using a sample of developed and developing countries this study empirically gauges the impact of the availability of financial services, as measured by the number of bank branches per 100,000 populations on income inequality. The results show that greater access to bank branches robustly reduces income inequality across countries. The study also documents that barriers to bank access significantly increases income inequality. (C) 2010 Elsevier B.V. All rights reserved.