nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒10‒01
four papers chosen by

  1. Determinants of the choice of a savings option: "The case of African Households" By Asare, Eris; Nakakeeto, Gertrude; Segarra, Eduardo
  2. Do remittance fl ows promote financial inclusion? By Immaculate Machasio
  3. Global Financial Risk, Domestic Financial Access, and Unemployment Dynamics By Epstein, Brendan; Finkelstein Shapiro, Alan; Gonzalez Gomez, Andres
  4. Do Incentives matter for Knowledge Diffusion? Experimental Evidence from Uganda. By Sseruyange, J.; Bulte, E.

  1. By: Asare, Eris; Nakakeeto, Gertrude; Segarra, Eduardo
    Abstract: Recent research shows that about 2.5 million people have no access to financial services worldwide. The research also shows that Africa, the home to 70 percent of the world’s least developed countries, has 80 percent of its population unbanked. These statistics are particularly disturbing as they have direct implications for economic growth. This is because, financial inclusion, including savings, has been shown to have a positive impact on economic growth and development. However, recent empirical research is limited in explaining the determinants of the choice of the savings option in Africa. By using survey data obtained from the World-Global Financial Inclusion (Global Findex) Database, 2014, we investigate how household’s characteristics affect their choice of a saving option. We use the multinomial probit model due to its ability to account for issues of independence of irrelevant alternatives (IIA). Our results indicate that there is a strong disconnect between female entrepreneurs and the formal banking sector.
    Keywords: Agricultural Finance
    Date: 2018–02–02
  2. By: Immaculate Machasio (University of Giessen)
    Abstract: In this paper, we evaluate whether remittances promote financial inclusion in developing countries. We construct an index of financial inclusion and present single equation estimates of the effects of remittances on financial inclusion. The paper uses data on remittance fl ows to 61 developing countries from different regions around the world spanning from 1990-2014 to explore this nexus. The study uses fixed effects estimations as well as GMM IV estimation method of panel data econometric analysis. The regression results confirm the hypothesis that remittances have an impact on financial inclusion through their effect on financial sector development. This can be intuitively explained by the fact that sending and receiving remittances increase senders and recipients use of financial services. The study shows that indeed remittances increase financial inclusion by about 2.49%. Remittances can therefore be considered a catalyst of financial inclusion in development.
    Keywords: Remittances, Financial inclusion, Instrumental variables
    JEL: C23 F34 H63
    Date: 2018
  3. By: Epstein, Brendan; Finkelstein Shapiro, Alan; Gonzalez Gomez, Andres
    Abstract: We empirically show that after an increase in global financial risk, the response of unemployment is markedly more subdued in emerging economies (EMEs) relative to small open advanced economies (SOAEs), while the differential response of GDP and investment across the two country groups is noticeably smaller, if at all, in EMEs. A model with banking frictions, frictional unemployment, and household and firm heterogeneity in financial inclusion can help rationalize these facts. Limited financial inclusion among households is central to explaining the differ- ential response of unemployment in EMEs amid global financial risk shocks.
    Keywords: Emerging economies, business cycles, unemployment, labor search frictions, financial frictions, financial inclusion.
    JEL: E24 E32 E44 F41
    Date: 2018
  4. By: Sseruyange, J.; Bulte, E.
    Abstract: Many development interventions involve training of beneficiaries, based on the assumption that knowledge and skills will spread “automatically” among a wider target population. However, diffusion of knowledge (or innovations) can be slow and incomplete. We use a randomized field experiment in Uganda to assess the impact of providing incentives for knowledge diffusion, and pay trained individuals a fee if they share knowledge obtained during a financial literacy training. Our main results are that incentives increase knowledge sharing, and that it may be cost-effective to provide such incentives. We also document an absence of assortative matching in the social learning process.
    Keywords: International Development, Research and Development/Tech Change/Emerging Technologies
    Date: 2018–07

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