nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒11‒25
two papers chosen by

  1. The impact of financial literacy and financial interest on risk tolerance By Hermansson, Cecilia; Jonsson, Sara
  2. Training, Human Capital, and Gender Gaps in Entrepreneurial Performance By Brixiová, Zuzana; Kangoye, Thierry

  1. By: Hermansson, Cecilia (Department of Real Estate and Construction Management, Royal Institute of Technology); Jonsson, Sara (Stockholm University)
    Abstract: We investigate and compare the effects of financial literacy and financial interest on risk tolerance, evaluating not only at the means, but also at the whole distribution. We use a unique sample of 12,156 Swedish bank customers combining bank-register data with survey data. Results show that both financial literacy and financial interest are associated with higher risk tolerance. They further show that the impact of financial interest is significantly higher than the impact of financial literacy. Differences are also observed across the distribution. Quantile regressions show that financial interest has its greatest association at the medium-to-high range of risk tolerance, whereas financial literacy shows its greatest association at the lower range of risk tolerance. Findings contribute to the literature on risk tolerance, specifically pointing to the relevance of the noncognitive trait, interest, to individuals’ risk tolerance.
    Keywords: Financial risk tolerance; financial literacy; financial interest; quantile regression
    JEL: D83 D91
    Date: 2019–11–18
  2. By: Brixiová, Zuzana; Kangoye, Thierry
    Abstract: In the aftermath of the global financial crisis, policymakers have been increasingly striving to support female entrepreneurship as a possible growth driver. This paper contributes to reconciling mixed findings in the literature on the effectiveness of entrepreneurial training with an analysis that links training and human capital, including tertiary education and non-cognitive skills, with gender gaps in entrepreneurial performance in Africa. We have found that while financial literacy training directly benefits men, it does not raise the sales level of women entrepreneurs. Instead, tertiary education has a direct positive link with the performance of women. Consistent with our theoretical model where different skills are complements, tertiary education can act as a channel that makes training effective. Regarding non-cognitive skills, evidence shows that women entrepreneurs who are tenacious achieve stronger sales performance. Our results underscore the importance of incorporating tertiary education and entrepreneurial training programs focused on a balanced set of skills, including non-cognitive skills, among policies for women entrepreneurs.
    Keywords: Female entrepreneurship,training,non-cognitive skills,tertiary education
    JEL: L53 O12 J4
    Date: 2019

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