Bank Account Ownership by Micro-entrepreneurs in Mexico

This paper evaluates the impact of a VAT rate increase on bank account ownershipby Mexican micro-entrepreneurs considering informality as the main channel of this effect. Using two rounds of a cross-section survey aimed at understanding financial inclusion in Me...

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Detalles Bibliográficos
Autor Principal: Rodríguez Zamora, Carolina
Otros Autores: The Economics of Informality Conference 2018
Formato: Objeto de conferencia (Conference Object)
Lenguaje:Inglés (English)
Publicado: Universidad del Rosario. Facultad de Economía 2018
Materias:
Acceso en línea:http://repository.urosario.edu.co/handle/10336/18253
Descripción
Sumario:This paper evaluates the impact of a VAT rate increase on bank account ownershipby Mexican micro-entrepreneurs considering informality as the main channel of this effect. Using two rounds of a cross-section survey aimed at understanding financial inclusion in Mexicoand a difference-in-difference strategy, results indicate that an increase in the VAT rate negatively affects the probability of having a bank account by micro-entrepreneurs in northern municipalities where the tax rate increased from 11 to 16 percent. In particular, financial inclusion of micro-entrepreneurs in the northern border decreased and the effect is statistically significant,whereas financial inclusion of formal and informal salaried workersin the northern borderdid not change as their fiscal obligations remained the same with the VAT amendment.