nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2017‒06‒25
two papers chosen by

  1. Who owns stocks in England: A panel analysis By Thomas Ashok; Luca Spataro
  2. Deposit Insurance, Remittances, and Dollarization; Survey-Based Evidence from a Top Remittance-Receiving Country By David A. Grigorian; Maxym Kryshko

  1. By: Thomas Ashok; Luca Spataro
    Abstract: We analyse the determinants of the decision to enter the stock market in England through a panel analysis on data drawn from the English Longitudinal Survey of Ageing dataset, for years 2002-2012. For doing this we use several methodologies including a probit model controlling for both unobserved heterogeneity and serial correlation through Correlated Random Effects, Generalized Estimating Equations and Generalized Linear Models. Additionally, the endogeneity of financial literacy is controlled for by using the Control Function approach. Financial literacy is found to be a significant determinant of the decision to enter the stock market, with an average partial effect of 5.8%. The education quality (proxied by student-teacher ratios) and the financial incentives observed at early ages (captured by the sharpe-ratios observed by individuals at early adult life) play a significant role as well. As for individual variables, both financial resources and social interaction attitude affect positively the probability to join the stock market.
    Keywords: stock market participation, financial literacy, panel analysis.
    Date: 2016–01–01
  2. By: David A. Grigorian; Maxym Kryshko
    Abstract: The paper uses a unique survey of remittance-receiving individuals from Tajikistan to study the impact of policy awareness on consumer behavior. The results show that knowledge of deposit insurance encourages the use of formal channels for transmitting remittances and reduces dollarization. Given the size and importance of remittances in Tajikistan, improving financial literacy and better publicizing details of the social safety net may encourage a more frequent use of formal channels for transferring remittances and reduce reliance on foreign exchange for transaction purposes. This is likely to improve bank profitability, enhance financial stability, and improve access to finance.
    Date: 2017–06–08

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