Abstract

The 2022 financial inclusion survey in Palestine has shown that the gender gap in bank account ownership stands at 28.2%, more than double the gap recorded in the MENA region and almost five-fold that of developing countries. Through descriptive analysis and reasoning, Harker et al. (2023) have shown that social norms, limited control of money, and low participation in the labor force are among the key drivers of women's financial exclusion in Palestine. Money is often controlled by men (e.g., husband, father, or son), and women with low or no income do not have a reason to use financial services and cannot afford them (Harker et al., 2013). Also, the COVID-19 pandemic has had far-reaching economic and social consequences, disrupting livelihoods and exacerbating existing inequalities. While the pandemic has presented new challenges, it has also accelerated the adoption of technology, particularly in terms of digital financial services. After Covid, the expansion of electronic payments options has been observed in many countries in sectors that wouldn’t have offer those services (Sahay et al., 2020).
The first objective of this study is to investigate the factors (economic, social and political) that contribute to the gender gap in financial inclusion in Palestine and assess the impact of the pandemic on this divide. This analysis will encompass both traditional financial services, such as savings accounts and credit facilities, as well as digital financial services, including electronic payments and digital banking platforms. The second objective is to investigate the impact of the COVID-19 pandemic on the gender gap in financial inclusion in Palestine. In other words, it aims to analyze how the economic shock, coupled with the adoption of technology for financial transactions during the pandemic, has influenced the gender gap in financial inclusion. Also, in the context of Palestine, limited research exists on financial inclusion, particularly with a gender lens. Therefore, this study aims to fill this gap and provide valuable insights into the factors specific to Palestine that contribute to the gender gap in financial inclusion. To achieve the research objectives, this study will employ decomposition methods combined with distributional regressions. The primary data source will be the Financial Inclusion Surveys conducted in Palestine in 2016 and 2022. These surveys provide comprehensive information on financial access, usage, and quality indicators at the individual level. The study will develop various indices of financial inclusion based on the available data, capturing different dimensions of access, usage, and quality of financial services.
For the decomposition analysis, we will employ the Katakawa-Oaxaca-Blinder (KOB) decomposition approach, combined with Recentered Influence Function Regressions (RIF-regression). This approach will allow us to explore if changes gender gaps are explained by differences in characteristics or differences in market factors (coefficients) are the most important ones when explaining the observed gender gaps.