Date of Award


Document Type


Degree Name

Master of Arts (MA)

Legacy Department


Committee Chair/Advisor

Baier, Scott L.

Committee Member

Jerzsmanowski , Michal M.

Committee Member

Tamura , Robert F.


Financial development enhances human development, and access to financial services makes a positive impact on people's lives particularly poor people. In addition, financial development reduces income inequality and boosts incomes. Over the last few decades, policymakers have considered financial sector reforms that promote financial inclusion. This paper attempts to show how financial inclusion is correlated with standard measures of economic development and economic well-being. To this end, we first measure the extent of financial inclusion by comparing economies and regions over time. Then, using this index of financial inclusion, we identify the factors associated with financial inclusion using a simple econometric model. My thesis contains two sections on this topic using two different models. One of the contributions of this paper is to provide a measurement of the financial inclusion in Turkey. In the first section, a multidimensional index of financial inclusion (IFI) as developed in Sarma (2008) measures the regions and cities of The Turkish Republic for the years 2004-2010. This measurement has been developed to allow for comparison of other countries with Turkey in terms of financial inclusion and how 'improved' financial inclusion can impact Turkey. The Human Development Index (HDI) values for these regions and cities have been found for the year 2008 developed in Unal (2008), as well as the relationship between IFI and HDI. As a consequence, levels of financial inclusion and human development in Turkey for regions and cities move parallel to one other. The second section contains a cross-country analysis which examines the levels of financial inclusion in EU member and candidate countries. This allows us the chance to make the comparison of EU member countries with Turkey as a candidate for the EU. For this purpose, we first compute the index of financial inclusion (IFI) for these countries for the years 2004-2010. Next, we identify the socioeconomic factors that are associated with financial inclusion. We have found that income is positively and significantly correlated with financial inclusion. Other factors like the HDI, inequality, and urbanization are statistically significant with the level of financial inclusion. As a comparison, Turkey has a lower financial inclusion level then several EU member countries. However, recent policy initiatives increase the level of financial inclusion in Turkey.

Included in

Economics Commons



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