nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒03‒04
two papers chosen by

  1. Financial Inclusion: New Measurement and Cross-Country Impact Assessment By Park, Cyn-Young; Mercado, Jr., Rogelio
  2. Who Values Access to College? By Athreya, Kartik B.; Ionescu, Felicia; Neelakantan, Urvi; Vidangos, Ivan

  1. By: Park, Cyn-Young (Asian Development Bank); Mercado, Jr., Rogelio (South East Asian Central Banks Research and Training Centre)
    Abstract: This paper introduces a new index of financial inclusion for 151 economies using principal component analysis to compute weights for aggregating nine indicators of access, availability, and usage. It then assesses the impact of financial inclusion on poverty and income inequality. The results provide evidence that high- and middle-high-income economies with high financial inclusion have significantly lower poverty, while no such relation exists for middle-low and low-income economies. The nonlinearities in the cross-country determinants and impacts of financial inclusion on poverty and income inequality across income groups are important to choosing the appropriate policies for achieving inclusive growth in different development stages.
    Keywords: financial inclusion; income inequality; poverty
    JEL: G18 O11 O16
    Date: 2018–03–15
  2. By: Athreya, Kartik B. (Federal Reserve Bank of Richmond); Ionescu, Felicia (Federal Reserve Board of Governors); Neelakantan, Urvi (CAFRAL and Federal Reserve Bank of Richmond); Vidangos, Ivan (Federal Reserve Board of Governors)
    Abstract: At first glance, college appears to be of great value to most, given its mean returns and sharply subsidized tuition. An empirically-disciplined human capital model that allows for variation in college readiness suggests otherwise: Nearly half of high school completers place zero value on access to college. This renders blanket subsidies potentially inefficient. As proof of principle, we show that redirecting subsidies away from those who would nonetheless enroll--towards a stock index retirement fund for those who do not even when college is subsidized--increases ex-ante welfare by 1 percent of mean consumption, while preserving enrollment and budget neutrality.
    Keywords: Human Capital; Higher Education; Financial Investment
    JEL: E21 G11 I24
    Date: 2019–02–20

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