nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2019‒12‒09
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Access to Formal Credit and Gender Income Gap: The Case of Farmers in Cambodia By SAM, Vichet
  2. Financial Literacy Assessment Instrument for Fiqh Mu'āmalāt Learning in Secondary Education By Setiawan, Adib Rifqi
  3. Investment Pattern of Youth in India with particular reference to Mumbai By Saikia, Sudarshana
  4. Undergraduate students’ economic literacy, knowledge of the country’s economic performance and opinions regarding appropriate economic policies By João Martins; Linda G. Veiga
  5. Thresholds of income inequality that mitigate the role of gender inclusive education in promoting gender economic inclusion in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: SAM, Vichet
    Abstract: This article analyzes the factors that drive the gender income difference among farmers in Cambodia with a focus on the access to formal credit, using the FinScope survey data. First, an Ordinary Least Square regression (OLS) is used to investigate the main determinants of farmers’ income, while an instrumental variable approach (IV) is estimated to check the causal effect of the access to formal credit on earnings. Next, the Blinder-Oaxaca technique is employed to decompose the gender earnings gap. Results from OLS regression show that individual education and health, farm size and other inputs, irrigation system and weather conditions, access to market and formal credit are strongly associated with farmers’ earnings, while the positive impact of access to formal credit is also confirmed by the IV regression at 5% significant level. These results suggest that improving infrastructure and formal credit access in the rural areas play a critical role in increasing farmers’ income. Then, based on the Blinder-Oaxaca decomposition technique, most of gender earnings difference is due to the endowment effect in favor of male farmers such as education, farm size and volume of work hours. Access to formal credit also contributes to the gender earnings gap, yet not in terms of endowment but coefficient effect, as a higher return to credit access for male farmers is observed. This could be due to the levels of education and financial literacy that are higher for men, allowing them to use the formal credit better. Closing the gap in education and financial literacy would therefore reduce their earnings gap. Discrimination against female farmers, not in terms of credit access, but in loan amount should be worth to consider as well, as the median of loan amounts of male farmers is higher than those of female. If such discrimination exists, it could also limit the women’s capacity to manage and invest in their farms effectively, and thus, the return to credit access must be lower for female farmers.
    Keywords: J16, J31, J43, J71
    JEL: J16 J31 J43 J71
    Date: 2019–11–21
  2. By: Setiawan, Adib Rifqi
    Abstract: The goal of this cross-sectional survey research was to find the validity and reliability of financial literacy assessment instrument for fiqh mu'āmalāt learning in secondary education. To reveal validity is assessed based on obtain judgement expert and reliability measured by internal consistency. It was gained that the validity is 7 items very feasible and 5 item quite feasible with reliability’s value is 0,843. This finding shows that assessment instrument can be used to analyze difficulties of students for designing lesson plan of fiqh mu'āmalāt learning with financial literacy oriented.
    Date: 2019–10–28
  3. By: Saikia, Sudarshana
    Abstract: A nation’s productive capacity depends on a healthy capital formation. Robust savings rate coupled with good capital mobilization are the key macro economic variables, which play a significant role in economic growth. A nation's savings and investment propensities also play a key role in achieving dynamic stability in the capital market. Per Capita Income in India has been on the rise since all of the last decade. With growth in the PCI, savings and investment in the country too has shown a northbound movement. At the same time, there has been a phenomenal rise in the youth population. This has made India the youngest nation with a demographic dividend appearing to be a reality. This young work force is expected to drive the engine of growth. In Economics, investment is generally held to mean formation of capital. As such, from a pure economics point of view, the formation of physical assets is important when considering investment. However this study focuses on what is referred to as Financial Investment i.e. investment in shares and securities aimed primarily at earning income rather than enhancing production. By virtue of this the words savings and investment come closer in meaning than traditionally seen. However a slight difference still remains which is that while savings is simply setting aside funds for future, investment also involves mobilizing them so that somebody else may use it for productive purposes. This study examines the savings and investment pattern of select college going students (Age: 17-25 years) in the city of Mumbai who has just begun to earn. The study also looks into the basic financial literacy amongst the youth; how they go about educating themselves, and how do they look at risk, returns and various modes of investments and what determines the same. Primary data was collected using a survey method. The information generated during data collection was both qualitative and quantitative. The major objectives of the study were (1) To understand the youngsters’ income and saving pattern. (2) To know their long-term financial goals. (3) To find out risk appetite of youngsters. (4) To find out whether the young investors are looking for long term growth or risk or return or liquidity. The study finds that safety and security, which were always important reasons for investment, are still influential in determining the direction of investment. Respondents liked to keep multiple options while choosing their investment options. However, returns on investment were obviously the most considered factor followed by risk. Saving accounts in banks appears to be the most common way of saving and investing for the respondents. Mutual fund has gained the favor of young investors. Investment in mutual funds through the Systematic Investment Plan (SIP) is a favored investment option for the youngsters. This is especially true of the young salaried class, which has just started earning and does not have a fat bank balance as yet. Youngsters today do know about the options available to them due to the rapid spread of information in recent times; they are not always sure about how to go about investing in newer ways actively. An informed investor is a good investor; there is opportunity for providing them with guidance and information but it has to be done in a way that is in accordance with their lifestyle – seminars and workshops are no longer the kind of options to peruse. Podcasts, online videos, forums and tutorials are the way of learning of the young generation. The social media platforms specially Face Book, Twitter, LinkedIn along with e-groups and websites can be a medium to spread awareness about various options available for the young investors. Thus, investor education can play a vital role in improving the active participation of the investors in the market, which can help them in the informed investment and in getting good returns.
    Date: 2018–03–26
  4. By: João Martins (NIPE and Department of Economics, University of Minho; and UNU-EGOV); Linda G. Veiga (NIPE and Department of Economics, University of Minho; and UNU-EGOV)
    Abstract: Based on a survey of more than 400 students at the University of Minho in Portugal, we analyse the relationship of (1) basic economic literacy, (2) knowledge of the country’s economic performance, and (3) opinions regarding appropriate economic policies, with previous economic training, and other socioeconomic variables. The results clearly show that economic training has a positive influence on students’ economic literacy and knowledge of the country’s current economic data and conditions. It also influences their assessment of how economic policy should be conducted. We argue that more training in Economics, both at the high school and university levels, is necessary to improve citizens’ knowledge for making personal and social decisions on economic issues. This recommendation is particularly relevant for countries that recently underwent deep economic crises.
    Keywords: economic literacy, knowledge of the country’s economic performance, opinion on economic policies, training in Economics
    Date: 2019
  5. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study provides thresholds of inequality that should not be exceeded if gender inclusive education is to enhance gender inclusive formal economic participation in sub-Saharan Africa. The empirical evidence is based on the Generalised Method of Moments and data from 42 countries during the period 2004-2014. The following findings are established. First, inclusive tertiary education unconditionally promotes gender economic inclusion while the interaction between tertiary education and inequality is unfavourable to gender economic inclusion. Second, a Gini coefficient that nullifies the positive incidence of inclusive tertiary education on female labour force participation is 0.562. Second, the Gini coefficient and the Palma ratio that crowd-out the negative unconditional effects of inclusive tertiary education on female unemployment are 0.547 and 6.118, respectively. Third, a 0.578 Gini coefficient, a 0.680 Atkinson index and a 6.557 Palma ratio are critical masses that wipe-out the positive unconditional effects of inclusive tertiary education on female employment. Findings associated with lower levels of education are not significant. As the main policy implication, income inequality should not be tolerated above the established thresholds in order for gender inclusive education to promote gender inclusive formal economic participation. Other implications are discussed in the light of Sustainable Development Goals. This research complements the existing literature by providing inequality thresholds that should not be exceeded in order for gender inclusive education to promote the involvement of women in the formal economic sector.
    Keywords: Africa; Inequality; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01

This nep-fle issue is ©2019 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.