Youth Financial Inclusion, Labor Force Participation and Economic Growth: A Comparative Study of India and the United States

Abstract

This study examined the trends and relationships between youth financial inclusion, labor force participation, and economic growth in India and the United States between 2014 and 2024. It adopted a quantitative, comparative framework using secondary data to analyze patterns over time and cross-country differences. Data are sourced from the World Bank Global Findex Database, World Development Indicators, and ILOSTAT. Trends are analyzed for account and debit card ownership, male and female labor participation, and total youth LFPR. The findings from correlation analysis showed that while financial inclusion supports GDP growth universally, labor force dynamics shape the extent and manner of its impact, particularly in emerging economies. In India, there is a decline in total youth LFPR despite rising GDP and LFPR, and financial inclusion are negatively correlated. However, in the USA, financial inclusion and labor force participation reinforce each other, supporting sustained GDP growth. Thus, the impact of labor force participation on economic performance is context-specific: in India, low female participation moderates total youth engagement, whereas in the US, youth can simultaneously pursue education, participate in labor, and access financial services. These findings underscore that the interplay between youth financial inclusion and labor participation affects economic growth differently across countries, pointing to the need for tailored policy interventions.