Effect of Financial Inclusion on On-Farm Labour Force Productivity and Employment

In this chapter, we examine the impact of financial inclusion on on-farm labour force productivity and employment using data extracted from the Ghana Socioeconomic Panel Survey. Using a multidimensional index of financial inclusion, we find that financial inclusion is associated with an increase in on-farm labour force productivity and employment among rural households. This result is robust to alternative ways of measuring on-farm labour force productivity and employment, financial inclusion cut-offs and estimation strategies. We identify household income and on-farm asset accumulation as important pathways through which financial inclusion influences on-farm labour force productivity and employment.