nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒07‒09
five papers chosen by

  1. Financial Inclusion, Regulation, Financial Literacy, and Financial Education in Armenia By Nurbekyan, Armen; Hovanessian, Naneh
  2. Financial Inclusion, Financial Literacy, and Financial Education in Azerbaijan By Ibadoghlu, Gubad
  3. Quicksand or Bedrock for Behavioral Economics? Assessing Foundational Empirical Questions By Victor Stango; Joanne Yoong; Jonathan Zinman
  4. Active Learning Fosters Financial Behavior: Experimental Evidence By Tim Kaiser; Lukas Menkhoff
  5. The Role of Financial Literacy and Money Education on Wealth Decisions By Alessandro Bucciol; Martina Manfre'; Marcella Veronesi

  1. By: Nurbekyan, Armen (Asian Development Bank Institute); Hovanessian, Naneh (Asian Development Bank Institute)
    Abstract: Financial inclusion has significantly advanced in Armenia during the last decade. Rural and urban areas, however, have benefited unevenly. The high cost of providing financial services, the lack of physical infrastructure, higher poverty rates, and the low level of financial literacy are the main barriers to financial inclusion in the rural areas. The availability of, and the high level of trust in, postal services in all villages, along with innovative technologies, should be exploited to address the inadequate physical infrastructure. Insurance services, in particular health and agriculture insurance, have a high growth potential. Mandatory health insurance along with an e-health infrastructure can boost high-quality financial inclusion. Targeted financial education policies addressing the most vulnerable groups, in particular the rural population and the unemployed, will significantly increase the quality of financial inclusion. Addressing data gaps, especially in the small and medium-sized enterprises sector, should be a priority for policy makers. Overall, a clear separation of strategies for financial inclusion from the National Strategy for Financial Education clarifying quantitative goals and policies will be beneficial.
    Keywords: financial inclusion; financial literacy; regulation; Armenia
    JEL: G21 G28 I22 O16
    Date: 2018–05–08
  2. By: Ibadoghlu, Gubad (Asian Development Bank Institute)
    Abstract: We discuss the status of financial inclusion, education, and literacy in Azerbaijan as well as measures to foster the development of small and medium-sized enterprises, which currently have inadequate access to financial resources. The Government of Azerbaijan is facing the primary challenge of defining its role in creating broader access to financial products and services. We highlight the barriers to financial inclusion, recommend solutions to overcoming the challenges, and discuss lessons learned and a potential way forward.
    Keywords: financial inclusion; financial education; financial literacy; SME; household; Azerbaijan
    JEL: D14 D18 G21 G28 I28
    Date: 2018–05–07
  3. By: Victor Stango (University of California-Davis); Joanne Yoong (University of Southern California, National University of Singapore, and the London School of Hygiene and Tropical Medicine); Jonathan Zinman (Dartmouth College and NBER)
    Abstract: Behavioral economics lacks empirical evidence on some foundational questions. We adapt standard elicitation methods to measure multiple behavioral factors per person in a representative U.S. sample, along with financial condition, cognitive skills, financial literacy, classical preferences, and demographics. Individually, behavioral factors are prevalent, distinct from other decision inputs, and correlate negatively with financial outcomes in richly-conditioned regressions. Conditioning further on other B-factors does not change the results, validating common practice of modeling B-factors separately. Corrections for low task/survey effort modestly strengthen the results. Our findings provide bedrock empirical foundations for behavioral economics, and offer methodological guidance for research designs.
    Date: 2018–04
  4. By: Tim Kaiser; Lukas Menkhoff
    Abstract: We conduct a randomized field experiment to study the effects of two financial education interventions offered to small-scale retailers in Western Uganda. The treatments contrast “active learning” with “traditional lecturing” within standardized lesson-plans. We find that active learning has a positive and economically meaningful impact on savings and investment outcomes, in contrast to insignificant impacts of lecturing. These results are not conditional on prior education or financial literacy. The active learning intervention seems to be superior as it works via three cognitive and non-cognitive mechanisms, i.e. increased financial knowledge, self-control, and financial confidence, while lecturing only affects financial confidence.
    Keywords: financial behavior, financial literacy, active learning, lecturing, training method, field experiment
    JEL: O16 D14 I21
    Date: 2018
  5. By: Alessandro Bucciol (Department of Economics (University of Verona)); Martina Manfre' (Department of Economics (University of Verona)); Marcella Veronesi (Department of Economics (University of Verona))
    Abstract: We investigate the impact of financial education on a wide range of wealth decisions using Dutch data from the DNB Household Survey. We consider two indexes representative of basic and advanced financial literacy acquired when adults, and money education received from the family during adolescence. Advanced financial literacy is a significant determinant of all the wealth outcomes under examination, while basic financial literacy affects only the propensity to plan for retirement and the likelihood of holding debt. Studying the individual components of financial literacy, the most relevant effects are associated with the understanding of numeracy and inflation, together with the correct knowledge of market mechanisms. Interestingly, money education received from the family during adolescence is as important as advanced financial literacy to foster individuals’ wealth decisions. We also find evidence of a gender gap, with males’ wealth decisions more affected by higher levels of financial education. Our results highlight the importance of improving financial knowledge not only through proper educational programs when adults, but also in the family environment during adolescence, where teens can learn positive attitudes towards money that are maintained throughout their life.
    Keywords: Financial literacy, Money education from family, Wealth decisions, Gender difference
    JEL: D14 I22
    Date: 2018–07

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