nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2018‒10‒29
two papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Closing Gender Gaps in India: Does Increasing Womens’ Access to Finance Help? By Purva Khera
  2. Analyzing Factors Affecting Financial Literacy and its Impact on Investment Behavior among Adults in India By Gangwar, Rachna; Singh, Ritvik

  1. By: Purva Khera
    Abstract: Gender gaps in womens’ economic opportunities—labor market and entrepreneurship—have remained high in India. Lack of adequate collateral limits women entrepreneurs’ ability to access formal finance, leaving them to rely on informal sources, constraining their growth. A small-open economy DSGE model is built to investigate the long-run macroeconomic impacts from closing gender gaps in financial access. Results suggest that an increase in women entrepreneurs access to formal credit results in higher female entrepreneurship and employment, which boosts India’s output by 1.6 percent. However, regulations and gender-specific constraints in the labor market limit potential gains as females’ access to quality jobs in the formal sector remains restricted. The paper shows that the factors influencing the number of females are different from those influencing the share of females in formal economic activity. Combining gender-targeted financial inclusion policies with policies that lower constraints on formal sector employment could boost India’s output by 6.8 percent.
    Date: 2018–09–28
  2. By: Gangwar, Rachna; Singh, Ritvik
    Abstract: Financial literacy is essential for making key financial decisions related to saving, borrowing and investment. Although numerable studies have been conducted to find elements of financial literacy, most of them focus on developed countries. This study aims to determine characteristics that affect levels of financial literacy in India and the impact of financial literacy on investment behavior. Primary data from 309 respondents across India was collected for the purpose of the study and was analyzed using empirical methods such as ordinary least square (OLS) regression and t-test. It was found that financial literacy among respondents was low and significant differences existed based on sociodemographic and economic factors. Unexpectedly, financial literacy was found to have no effect on investment behavior. To the best of the authors’ knowledge, this study is among the first, if not the first, of its kind to be conducted in India. The findings have significant implications for financial education and public policy programs.
    Keywords: Financial Literacy,Investment Behavior,Household Finance,Socioeconomic Characteristics
    JEL: D14 D19 G11
    Date: 2018

This nep-fle issue is ©2018 by Viviana Di Giovinazzo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.