nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒08‒19
eight papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. ICT and Ethical Finance: Fostering Social Innovation and Financial Inclusion By Gian-Luca GASPARINI; Aurora PROSPERO
  2. Who Is a Passive Saver under Opt-In and Auto-Enrollment? By Shah Goda, Gopi; Levy, Matthew R.; Flaherty Manchester, Colleen; Sojourner, Aaron J.; Tasoff, Joshua
  3. Determinants of Mobile Broadband Use in Developing Economies: Evidence from Sub-Saharan Africa By Maude Hasbi; Antoine Dubus
  4. Mobile Money and the Labor Market: Evidence from Developing Countries By Chiara, De Gasperin; Valentina, Rotondi; Luca, Stanca
  5. The Standard Portfolio Choice Problem in Germany By Breunig, Christoph; Huck, Steffen; Schmidt, Tobias; Weizsäcker, Georg
  6. Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions? By M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
  7. Widening the high school curriculum to include soft skill training: impacts on health, behaviour, emotional wellbeing and occupational aspirations By Lordan, Grace; Mcguire, Alistair
  8. The power of economic textbooks: A discourse analysis By Bäuerle, Lukas

  1. By: Gian-Luca GASPARINI (SEFEA Consulting, Padua, Italy); Aurora PROSPERO (SEFEA Consulting, Padua, Italy)
    Abstract: This paper describes the links between ethical and responsible finance and social innovation. The two have long been in a close relationship. Ethical and responsible finance has traditionally supported projects that face difficulties in the mainstream banking sector, fostering experimental approaches (to give but an example) to market failures of traditional welfare. Moreover, ethical and responsible finance is interested not only on the economic viability of a project to fund, but also its social and/or environmental impact.The additional dimension brought about by the impact of the activities of ethical and responsible finance is social innovation. This potentially encompass several disciplines, phenomena and social constructs, which makes it difficult to analyse. However, interest in social innovation is increasing, especially concerning digital social innovation. After the theoretical analysis, the focus shifts to the PROFIT platform, presented as a practical example of ICT response to the need for improving the financial knowledge and literacy of the citizens for better decision-making and social resilience. During the creation of the platform, its creators have taken the diversity of the potential beneficiaries into account, in order to be useful for as many social groups as possible. The paper concludes with an analysis of the digital social innovation potential of the PROFIT platform.
    Keywords: ethical finance; responsible finance; social innovation; social impact; PROFIT, online platform; financial literacy
    JEL: A13 A20 I22 O32
    Date: 2019–11
  2. By: Shah Goda, Gopi (Stanford University); Levy, Matthew R. (London School of Economics); Flaherty Manchester, Colleen (University of Minnesota); Sojourner, Aaron J. (University of Minnesota); Tasoff, Joshua (Claremont Graduate University)
    Abstract: Defaults have been shown to have a powerful effect on retirement saving behavior yet there is limited research on who is most affected by defaults and whether this varies based on features of the choice environment. Using administrative data on employer-sponsored retirement accounts linked to survey data, we estimate the relationship between retirement saving choices and individual characteristics – long-term discounting, present bias, financial literacy, and exponential growth bias – under two distinct choice environments: an opt-in regime and an auto-enrollment regime. Consistent with our conceptual model, we find that the determinants of following the default and contribution behavior are regime-specific. Under the opt-in regime, financial literacy plays an important role in predicting total contributions, active saving choices, and maxing out contributions in the tax-preferred account. In contrast, under the auto-enrollment regime, present bias is the most significant behavioral predictor of contribution behavior. A causal interpretation of the estimates suggests that auto-enrollment increases saving primarily among those with low financial literacy.
    Keywords: present bias, exponential-growth bias, household finance, retirement saving decisions, choice architecture, defaults, financial literacy, procrastination
    JEL: D91 J26 J32 D14 M52
    Date: 2019–07
  3. By: Maude Hasbi (I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris - CNRS - Centre National de la Recherche Scientifique); Antoine Dubus (Télécom ParisTech)
    Abstract: Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries' development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that SIM card ownership and being part of an online social community has a strong positive impact on mobile broadband use. We also highlight a positive correlation between digital inclusion and financial inclusion as mobile money users and bank account users are found to be more inclined to use mobile broadband. However, beyond apparent similarities, mobile broadband is used in different ways according to countries specificities. For instance, among the non-mobile owners in Nigeria, the unemployed are the most likely to use mobile broadband, most probably for job search practices, while it is rather used by students for information gathering in other countries. Finally we show that those excluded from mobile broadband use are the eldest, those with the lowest level of education, and women.
    Keywords: O12,L50,L96,O55,Financial Inclusion,Digital Gap JEL Classification: I30,Mobile Broadband Use,Developing Economy
    Date: 2019–08–07
  4. By: Chiara, De Gasperin; Valentina, Rotondi; Luca, Stanca
    Abstract: Mobile money can play an important role in improving financial inclusion and, as a consequence, employment outcomes, especially in areas where adequate financial infrastructures are lacking. In this paper, we study the effects of mobile money use on the employment outcomes of individuals in 8 developing countries. Our findings indicate that, relative to non-users, individuals who use mobile money are more likely to become self-employed and to receive a regular wage. In particular, the positive association between mobile money use and regular wage is found to be robust also when explicitly addressing the potential endogeneity of mobile mobile money. Overall, the evidence suggests that policies aimed at favoring access to and use of mobile money can provide an e ective and relatively inexpensive tool in the agenda for sustainable development.
    Keywords: Mobile Money, Digital Revolution, Labor Market.
    JEL: O16 O17 O33
    Date: 2019–03
  5. By: Breunig, Christoph (HU Berlin); Huck, Steffen (WZB Berlin and UCL); Schmidt, Tobias (QuantCo); Weizsäcker, Georg (HU Berlin and DIW Berlin)
    Abstract: We study an investment experiment with a representative sample of German households. Respondents invest in a safe asset and a risky asset whose return is tied to the German stock market. Experimental investments correlate with beliefs about stock market returns and exhibit desirable external validity at least in one respect: they predict real-life stock market participation. But many households are unresponsive to an exogenous increase in the risky asset\'s return. The data analysis and a series of additional laboratory experiments suggest that task complexity decreases the responsiveness to incentives. Modifying the safe asset\'s return has a larger effect on behaviour than modifying the risky asset\'s return.
    Keywords: stock market expectations; stock market participation; portfolio choice; financial literacy; complexity;
    JEL: D01 D14 D84 G11
    Date: 2019–07–30
  6. By: M. Martin Boyer; Philippe d'Astous; Pierre-Carl Michaud
    Abstract: We conduct a stated-choice experiment to analyze the decision to contribute to front- or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on these accounts. We assess whether respondents learn about the tax implications of these accounts and make contribution choices that increase after-tax income when exposed to the intervention. We find that our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 percent) and contribution decisions. We find effects on after-tax lifetime-income for respondents by up to $1,900 per scenario presented.
    JEL: D14 G11 H31
    Date: 2019–07
  7. By: Lordan, Grace; Mcguire, Alistair
    Abstract: From 2020 Personal, Social, Health and Economic Education will be compulsory in UK schools for adolescents, however less is known about how it can be taught in a an effective manner. We examine, through a randomised trial, the impact of an evidenced based health related quality of life (HRQoL) curriculum called Healthy Minds that ran in 34 high schools in England over a four-year period. We find robust evidence that Healthy Minds positively augments many physical health domains of treated adolescents. We also find some evidence that Healthy Minds positively affects behaviour, but has no impact on emotional wellbeing. We find notable gender effects, strongly favouring boys. We also present evidence that Healthy Minds changes career aspirations, with those exposed to treatment being less likely to choose competitive work and more likely to choose work that involves "people-skills". Overall our work illustrates the potential for later childhood interventions to promote HRQoL and develop the career aspirations of adolescents.
    Keywords: soft skills; health related quality of life; character; high school curriculum; personal; social; health and economic education
    JEL: I18 I20
    Date: 2019–06
  8. By: Bäuerle, Lukas
    Abstract: By conducting a discourse analysis (SKAD) in the field of academic economics textbooks, this paper aims at reconstructing frames and identity options offered to undergraduate students relating to the questions "Why study economics?"and "Who do I become by studying economics?". The analysis showed three major frames and respective identity offerings, all of which are contextualized theoretically, with prominent reference to the Foucauldian reflection of the science of Political Economy. Surprisingly, none of them encourages the student to think critically, as could have been expected in a pedagogical context. Taken together, economics textbooks appear as a "total structure of actions brought to bear upon possible action" (Foucault), therefore, as a genuine example of Foucauldian power structures.
    Keywords: Economic education,textbook economics,discourse analysis,SKAD,Foucault,subjectivation
    JEL: A11 A14 A20 A22
    Date: 2019

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