nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒02‒17
eight papers chosen by

  1. Sending money home: Transaction cost and remittances to developing countries By Ahmed, Junaid; Mughal, Mazhar; Martínez-Zarzoso, Inmaculada
  2. Setting Up a Communication Package for the Italian NDC By Boeri,Tito; Cozzolino,Maria; Di Porto,Edoardo
  3. Finansal Kapsayicilik : Turkiye ve Dunya Karsilastirmasi By Unal Seven; Ahmet Duhan Yassa; Fatih Yilmaz
  4. Adopting mobile money: Evidence from an experiment in rural Africa By Catia Batista; Pedro C. Vicente
  5. Sweden?s Fifteen Years of Communication Efforts By Boado-Penas,María del Carmen; Settergren,Ole; Ekheden,Erland; Naka,Poontavika
  6. The economic forces driving fintech adoption across countries By Jon Frost
  7. Reverse Mortgages, Financial Inclusion, and Economic Development : Potential Benefit and Risks By Knaack,Peter; Miller,Margaret J.; Stewart,Fiona Elizabeth
  8. Inequality Thresholds, Governance and Gender Economic Inclusion in sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo

  1. By: Ahmed, Junaid; Mughal, Mazhar; Martínez-Zarzoso, Inmaculada
    Abstract: Remittances, the part of the migrant's income sent back to their family living in the origin country, have become a critical stepping-stone to economic development for many developing nations. A key factor that causes migrants to use informal channels is the high cost of transferring funds through formal channels. Reducing the cost of remitting is one of the 2030 Sustainable Development Goals; it is also an important policy objective as it helps to bring remittances into the formal economy, enhances financial inclusion and increases the net income of receiving households. This study examines the question of whether and to what extent the reduction in the cost of remittances increases the flow of remittances to developing countries, and whether larger amounts are remitted when the cost per transaction decreases (the so-called scale effect). It uses bilateral data on remittance flows and exploits a novel dataset covering transaction costs for 30 sending and 75 receiving countries for the period 2011-2017. A gravity model of remittance flows is estimated using panel data and instrumental variable techniques to account for potential endogeneity. We find that transaction cost is a significant predictor of the volume of formal remittances. A 1 percent decrease in the cost of remitting USD 200 leads to about a 1.6 percent increase in remittances. This association remains unchanged regardless of the models used and techniques employed. In addition to this strong impact of transfer fees, migrant stock, exchange rate stability in the recipient country and financial development in both the recipient and sending countries are also found to be important factors driving remittances. The findings suggest that policies designed to increase remittances need to focus on decreasing the cost of remitting through formal channels.
    Keywords: bilateral remittances,cost of remitting,international migration,developingcountries
    JEL: F22 F24 F30 O10 O17
    Date: 2020
  2. By: Boeri,Tito; Cozzolino,Maria; Di Porto,Edoardo
    Abstract: In the last 30 years the Italian pension system was repeatedly reformed and counter-reformed, increasing uncertainty about future pensions. A low level of financial literacy exacerbated this problem. In 2015, the Italian Social Security Institute (INPS) launched a project to allow all insured workers to have more precise information about their future benefits. This paper analyzes the results of a survey carried out to evaluate the project?s performance. The findings are encouraging ? around 80 percent of respondents rate the INPS service as at least ?very helpful.? Even if 42 percent of the sample overestimates their future pension, 16 to 29 percent reveal a willingness to change their expectation on retirement income after receiving new information.
    Keywords: Pensions&Retirement Systems,Financial Literacy,Educational Sciences,Social Protections&Assistance,Labor Markets
    Date: 2019–04–01
  3. By: Unal Seven; Ahmet Duhan Yassa; Fatih Yilmaz
    Abstract: [TR] Bu calismada, finansal kapsayiciligin dunya ve Turkiye'deki son on yillik gelisimi karsilastirmali olarak sunulduktan sonra mikro veriler ile Turkiye'deki temel demografik gostergelerle iliskisi analiz edilmektedir. Analiz bulgularina gore, dunya genelinde son on yilda finansal kapsayicilikta onemli yol alinmakla beraber, gelismis ulkeler ile gelismekte olan ulkeler arasindaki farkin korundugu gercegi karsimiza cikmaktadir. Turkiye'nin finansal kapsayicilik performansinin ayni gelir grubu ulke ortalamasina gore daha iyi durumda oldugu gorulmektedir. Buna karsin, veriler Turkiye'de kadinlarin finansal sisteme katiliminin benzer ulke ortalamasinin oldukca altinda kaldigini gostermektedir. Yapilan bolgesel karsilastirilmalarda, kadinlarin isgucune katiliminin dusuk oldugu bolgelerde ayni zamanda finansal sisteme katilimin da dusuk oldugu sonucuna ulasilmistir. Bununla beraber, egitim seviyesi ve gelir ile finansal kapsayicilik arasinda pozitif iliski bulunmaktadir. [EN] In this study, we firstly analyze the development of financial inclusion across the globe and in Turkey over the last decade and then, provide a more focused study on the relation between financial inclusion and regional demographics in Turkey. According to the findings, despite the significant progress in financial inclusion over the last decade, the inclusion gap between developed and developing countries has been preserved. More specifically, Turkey's performance in financial inclusion appears to be in better shape as compared to the countries in the same income group (upper-middle income). In contrast, the data also shows that women participation in financial system remained well below in Turkey relative to the same income group countries. According to the regional comparisons, we conclude that regions with low women labor force participation also indicates poor financial inclusion. Additionally, financial inclusiveness is positively correlated with regional education and income levels.
    Date: 2020
  4. By: Catia Batista; Pedro C. Vicente
    Abstract: Who uses mobile money? And what is mobile money used for? This paper describes the mobile money adoption patterns following the experimental introduction of mobile money services for the first time in rural areas of Southern Mozambique. In particular, we examine the individual characteristics of early and late adopters, as well as their mobile money usage patterns. For this purpose, we use a combination of administrative and household survey data to characterize the adoption of mobile money services in the three years following their initial introduction. We find that a large proportion of the individuals who were offered mobile money services adopted this technology. These users of mobile money (and early adopters in particular) are more educated than non-users, and they also are more likely to already hold a bank account. Positive-self-selection into mobile money usage raises the question of whether mobile money is an effective tool for financial inclusion.
    Keywords: Fintech, Mobile money, Technology adoption, Self-selection, Financial inclusion, Financial deepening, Mozambique, Africa.
    Date: 2020
  5. By: Boado-Penas,María del Carmen; Settergren,Ole; Ekheden,Erland; Naka,Poontavika
    Abstract: It is desirable that pension reforms and legislated rules have the backing of thepopulation or at least are accepted by voters. With the objective of achieving ?acceptance,?the Swedish Pensions Agency publishes an annual actuarial balance of the solvency of the whole public pension system and distributes to each participant information on his or her individual accumulated notional balance and funded accounts, movements during the year,and estimates of the projected individual future pension amount. This paper describes the Swedish pension experience in communication with pension participants over the last decade, together with the main changes in information delivered to improve individuals? pension knowledge and help them make more informed, better decisions on work, savings,and retirement.
    Keywords: Pensions&Retirement Systems,Social Protections&Assistance,Population&Development,Financial Literacy,Labor Markets
    Date: 2019–04–01
  6. By: Jon Frost
    Abstract: Fintech is being adopted across markets worldwide - but not evenly. Why not? This paper reviews the evidence. In some economies, especially in the developing world, adoption is being driven by an unmet demand for financial services. Fintech promises to deliver greater financial inclusion. In other economies, adoption can be related to the high cost of traditional finance, a supportive regulatory environment, and other macroeconomic factors. Finally, demographics play an important role, as younger cohorts are more likely to trust and adopt fintech services. Where fintech helps to make the financial system more inclusive and efficient, this could benefit economic growth. Yet the market failures traditionally present in finance remain relevant, and may manifest themselves in new guises.
    Keywords: fintech, digital innovation, financial inclusion, financial regulation
    JEL: E51 G23 O33
    Date: 2020–02
  7. By: Knaack,Peter; Miller,Margaret J.; Stewart,Fiona Elizabeth
    Abstract: This paper examines the state of reverse mortgage markets in selected countries around the world and considers the potential benefits and risks of these products from a financial inclusion and economic benefit standpoint. Despite potentially increasing demand from aging societies -- combined with limited pension income -- a series of market failures constrain supply and demand. The paper discusses a series of market failures on the supply side, such as adverse selection, moral hazard, and the costly regulation established to address these problems, leading to only a small number of providers, even in developed markets. Demand-side constraints are equally relevant, in particular high non-interest costs, abuse concerns, and the inability of reverse mortgages to cover key risks facing the elderly, particularly health and elder care. In developing countries, constraints are likely to be even higher than in advanced economies, due to high transaction costs and lack of consumer knowledge and protection. The enabling conditions for such markets to develop are outlined, along with examples of regulatory oversight. The paper concludes that these still seem to be largely products of last resort rather than well-considered purchases as part of good retirement planning.
    Date: 2020–01–30
  8. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: Inequality and gender economic exclusion are major policy concerns facing sub-Saharan Africa in the post-2015 development agenda. The study provides critical masses of inequality that should not be exceeded if governance is to promote gender economic participation. The research focuses on 42 countries in sub-Saharan Africa using annual data spanning from 2004 to 2014. The empirical evidence is based on the Generalized Method of Moments. The following findings are established. First, inequality (i.e. the Gini coefficient) levels that completely nullify the positive effect of governance on female labour force participation are 0.708 for political stability, 0.601 for voice & accountability, 0.588 for government effectiveness, 0.631 for regulatory quality, 0.612 for the rule of law, and 0.550 for corruption-control. Second, inequality thresholds at which female unemployment can no longer be mitigated by governance channels include: 0.561 (for political stability) and 0.465 (for the rule of law). Third, inequality levels that completely dampen the positive impact of governance on female employment are 0.608 for political stability, 0.580 for voice & accountability, 0.581 for government effectiveness, and 0.557 for the rule of law. As the main policy implication, for good governance to promote gender economic inclusion, inequality levels should not exceed established thresholds.
    Keywords: Africa; Gender; Inequality; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2019–01

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