nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒07‒16
four papers chosen by

  1. Financial Literacy of Middle and Older Generations in Japan By Satoshi Shimizutani; Hiroyuki Yamada
  2. Financial Inclusion, Financial Literacy, and Financial Education in Georgia By Babych, Yaroslava; Grigolia, Maya; Keshelava, Davit
  3. Fixed rate versus adjustable rate mortgages: evidence from euro area banks By Ugo Albertazzi; Fulvia Fringuellotti; Steven Ongena
  4. Financial Literacy in Japan: Determinants and Impacts By Yoshino, Naoyuki; Morgan, Peter; Trinh, Long Q.

  1. By: Satoshi Shimizutani (Nakasone Yasuhiro Peace Institute); Hiroyuki Yamada (Faculty of Economics, Keio University)
    Abstract: Financial literacy holds growing importance for managing assets/savings during the longer retirement period currently experienced in rapidly aging countries, which is most relevant to Japan. We examine levels and determinants of financial literacy as well as its association to asset allocation among middle and older generations of Japan using data from JSTAR (Japanese Study on Aging and Retirement) collected in 2009. We present some interesting findings. First, financial literacy is generally associated with educational attainment, cognitive skills, coursework in economics or finance, and income level. Second, financial literacy is associated with resultant asset allocation; individuals with higher literacy are more likely to invest in stocks or securities separate from their savings.
    Keywords: financial literacy, Japan, JSTAR, household asset allocation
    JEL: D14 G11 J26
  2. By: Babych, Yaroslava (Asian Development Bank Institute); Grigolia, Maya (Asian Development Bank Institute); Keshelava, Davit (Asian Development Bank Institute)
    Abstract: We provide a comprehensive overview of the current state of financial inclusion and financial literacy in Georgia based on the latest literature, statistical evidence, and recent surveys. We review current government policy initiatives and strategy documents aimed at improving financial access of SMEs and households; analyze the state of the regulatory framework in Georgia; focus on the causes behind the current low levels of financial inclusion and financial literacy among the young, the poor, and the rural population; and provide policy recommendations to comprehensively address the financial inclusion problem in Georgia.
    Keywords: economic development; financial stability; financial literacy; financial inclusion; financial education
    JEL: G20 G21 G23 G28
    Date: 2018–06–14
  3. By: Ugo Albertazzi (European Central Bank); Fulvia Fringuellotti (University of Zurich); Steven Ongena (University of Zurich)
    Abstract: Why do some residential mortgages carry a fixed interest rate and others an adjustable rate? To answer this question we studied unique data from 103 banks belonging to 73 different banking groups across twelve countries in the euro area. To explain the large cross-country and time variations observed, we distinguished between the conditions that determine the local demand for credit and the characteristics of banks that supply credit. As bank funding mostly occurs at the group level, we disentangled these two sets of factors by comparing the outcomes observed for the same banking group across the different countries. Local demand conditions dominate. In particular we find that the share of new loans with a fixed rate is larger when: (1) the historical volatility of inflation is lower, (2) the correlation between unemployment and the short-term interest rate is higher, (3) households' financial literacy is lower, and (4) the use of local mortgages to back covered bonds and of mortgage-backed securities is more widespread.
    Keywords: mortgages, financial duration, cross-border banks
    JEL: F23 G21
    Date: 2018–06
  4. By: Yoshino, Naoyuki (Asian Development Bank Institute); Morgan, Peter (Asian Development Bank Institute); Trinh, Long Q. (Asian Development Bank Institute)
    Abstract: Financial literacy is gaining increasing importance as a policy objective in many countries. However, internationally comparable information on financial literacy is still scarce. Recently, the Bank of Japan conducted a major survey of financial literacy and financial behavior covering 25,000 individuals aged from 18 to 79. We used this database to analyze the determinants of financial literacy and the effects of financial literacy on other behaviors. Generally, our study corroborated the findings of studies on other countries, but it uncovered some differences as well. We found that the main determinants of financial literacy are the educational level, income, age, and occupational status and that both financial literacy and general education levels are related positively and significantly to savings behavior and financial inclusion.
    Keywords: financial literacy; financial behavior; financial inclusion; household saving; Japan
    JEL: D14 G11 J26
    Date: 2017–12–14

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