Remittances as an opportunity to increase savings and financial inclusion of youth in South East Europe

Paper discusses financial inclusion of youth focussing on effects of remittances on financial inclusion of youth (usage of debit card, credit card, savings and borrowing instruments) in South East Europe. It is argued that remittances, as stable sources of income (capital), contribute to savings and lead to an improvement in financial inclusion of individuals who receive remittances. We test our hypothesis that remittances contribute to increase in savings and in the level of financial inclusion of youth in South East European countries. We estimate probit regression models with a set of dummy dependent variables for financial inclusion: having a debit card, having a credit card, borrowing and savings, and regress them on receipt of remittances controlling for age, gender, education and income level. Results show negative impact of remittances on youth financial inclusion in selected countries with respect to having debit card, credit card and borrowing. On the other hand, results show positive effect of remittances on savings among youth that receive remittances.