Population Aging and the Nexus Between Financial Development and Wealth Inequality

  • Dong Hyeon Kim
  • , Shu Chin Lin*
  • , Peiyao Liu
  • *Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Wealth is increasingly concentrated at the top, with financial development often cited as a key driver. As populations age, it is crucial to understand how aging reshapes the link between financial development and wealth inequality. Using a cross-country panel, we find that while financial development generally reduces wealth inequality, its effect may weaken or even reverse when population aging exceeds a threshold. Pathway analysis shows that saving and entrepreneurship mediate these effects. Financial development may dampen them, but aging can moderate or reverse this impact. These findings underscore the importance of demographics in shaping the distributional consequences of financial development.

Original languageEnglish
Article numbere70048
JournalInternational Review of Finance
Volume25
Issue number4
DOIs
Publication statusPublished - 2025 Dec

Bibliographical note

Publisher Copyright:
© 2025 The Author(s). International Review of Finance published by John Wiley & Sons Australia, Ltd on behalf of International Review of Finance Ltd.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

  1. SDG 10 - Reduced Inequalities
    SDG 10 Reduced Inequalities

Keywords

  • entrepreneurship
  • financial development
  • population aging
  • saving
  • wealth inequality

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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