nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒02‒03
five papers chosen by

  1. The Effect of Ability Matching and Differentiated Instruction in Financial Literacy Education. Evidence from Two Randomised Control Trials. By Kaat Iterbeke; Kristof De Witte; Koen Declercq; Wouter Schelfhout
  2. Effect of a Health Shock on Working Hours and Health Care Usage: The role of Financial Inclusion By Paul Owusu Takyi; Roberto Leon-Gonzalez
  3. Microfinance and Human Development in Kerala By Kuriakose, Francis; Joseph, Janssen
  4. IFAD RESEARCH SERIES 51 Inclusive finance and rural youth By Gasparri, Arianna; Munoz, Laura
  5. Inequality and gender economic inclusion: the moderating role of financial access in Sub-Saharan Africa By Simplice A. Asongu; Joseph Nnanna; Paul N. Acha-Anyi

  1. By: Kaat Iterbeke; Kristof De Witte; Koen Declercq; Wouter Schelfhout
    Abstract: The present paper examines the impact of ability matching and differentiated instruction on the learning outcomes of eighth and ninth grade students in a financial education programme. In particular, the effect of within-class ability matching is investigated by forming pairs of students either randomly or based on their abilities. In addition, the paper studies whether differentiated instruction, in the form of additional instructions for lower ability students, enhances the impact of the financial education programme. The paper provides evidence on the effects of both practices using two randomised control trials involving 65 schools and 2,407 students. Overall, the results suggest that the programme raises the financial proficiency of students by 0.18 standard deviations. Although the learning outcomes of the average student are not affected by the differentiation practices, non-native students significantly benefit from differentiated instruction.
    Keywords: financial literacy, ability matching, differentiated instruction, randomised control trial
    JEL: C93 I21 O16
    Date: 2019
  2. By: Paul Owusu Takyi (National Graduate Institute for Policy Studies, Tokyo, Japan); Roberto Leon-Gonzalez (National Graduate Institute for Policy Studies, Tokyo, Japan)
    Abstract: This study explores the role of financial inclusion in the mitigation of the effects of a health shock at the household level. To that end, we examine empirically the effect of financial inclusion on household working hours and health care utilization, using round six of the Ghana Living Standard Survey data. We find that a health shock does decrease household working hours and increase the likelihood of health care utilization. This suggests that households in Ghana are not able to fully insure themselves against a health shock. However, we find that, faced with a health shock, households who are financially excluded see their working hours reduce more than those who enjoy full financial inclusion. Also, financial inclusion increases the likelihood of health care utilization when households experience a health shock. We find evidence that loan acquisition (borrowing) is one of the main mechanisms by which households can insure themselves against a health shock. Generally, our findings support the financial inclusion agenda of policymakers in Ghana and many other countries. Thus, efforts to ensure full financial inclusion will increase the probability of households using the financial sector as a means of insulating themselves against the effects of health shocks.
    Date: 2020–01
  3. By: Kuriakose, Francis; Joseph, Janssen
    Abstract: This paper examines how microfinance institutions impact human development indicators using the case of Kerala in southern India. The study uses an institutional approach to understand microfinance institutions with the help of three variables - core activities, total loan portfolio and approach to microfinance. The impact of microfinance institutions on four human development variables namely education, health, income and participation are analyzed. The main conclusion of the study is that microfinance institutions that follow an integrated approach impact human development more than those that follow a minimalist approach. Furthermore, this impact of microfinance institution is due to production functions that generate income and protective function that defends against vulnerability. Therefore, an integrated approach to microfinance has income generating and risk mitigating effects that translate into better human development indicators.
    Keywords: Microfinance, Human development, Financial inclusion, Social welfare, Kerala
    JEL: G2 G21 I3 I31 I38
    Date: 2020–03–14
  4. By: Gasparri, Arianna; Munoz, Laura
    Abstract: This working paper deepens the analysis on inclusive finance and rural youth through cutting-age research and new insights and approaches that have emerged over the years in the field. The overall narrative clear ly documents the ways in which rural youth engage with the economy, policy and institutions and identifies the rapid changes occurring across the globe as well as the opportunities and challenges that young people living in rural areas encounter in their different livelihoods. Within this context, financial inclusion has gained attention as a key contributing factor to unlock the potential of rural youth in driving sustainable and inclusive rural transformation. This paper investigates how recent developments in this sector entail new opportunities for rural youth, and highlights persisting barriers that prevent rural youth from accessing financial and non-financial services, making the case for a market system approach to financial inclusion with specific attention given to digital finance. The youth employment challenge is a global development priority. In many developing countries, high youth unemployment rates, significant proportions of working poor in vulnerable employment and economic disengagement together pose the risk of creating disaffection, driving migration, inciting social unrest and slowing progress toward development goals. The paper documents the increasing body of evidence about the positive link between financial inclusion and individual welfare, business creation and women’s empowerment but also highlights the body of research that questions such a positive narrative, pointing out the lack of a sound and functional financial inclusion ecosystem.
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Environmental Economics and Policy
    Date: 2019
  5. By: Simplice A. Asongu (Yaoundé/Cameroon); Joseph Nnanna (The Development Bank of Nigeria, Abuja, Nigeria); Paul N. Acha-Anyi (Walter Sisulu University, South Africa)
    Abstract: This study assesses how financial access can be used to modulate the effect of income inequality on gender economic inclusion. The focus is on 42 countries in sub-Saharan Africa (SSA) for the period 2004-2014 and the empirical evidence is based on Generalised Method of Moments (GMM) and Fixed Effects (FE) regressions. Significant results are not apparent in the FE regressions. The following main findings are established from the GMM estimations. There is a negative net effect from the role of financial access in modulating the effect of the Palma ratio on female labour force participation while there is a positive net effect from the relevance of financial access in moderating the effect of the Gini coefficient on female unemployment. There are also net negative effects from the role of financial access in modulating the Gini coefficient and the Palma ratio for female employment. The unexpected findings are elucidated and implications are discussed in the light of challenges to Sustainable Development Goals in the sub-region. Inter alia: financial access is a necessary but not a sufficient moderator of income inequality for the enhancement of women’s participation in the formal economic sector.
    Keywords: Africa; Finance; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01

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