nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒08‒10
nine papers chosen by

  1. Financial Literacy in South Africa By Lwanga Elizabeth Nanziri; Matthew Olckers
  2. Who Adopts Crypto Assets in Japan? Evidence from the 2019 Financial Literacy Survey By Hiroshi FUJIKI
  3. Training, Human Capital, and Gender Gaps in Entrepreneurial Performance By Zuzana Brixiová; Thierry Kangoye; Mona Said
  4. Financial inclusion and poverty transitions: an empirical analysis for Italy By Giulia Bettin; Claudia Pigini; Alberto Zazzaro
  5. What Determines Consumer Financial Distress? Place- and Person-Based Factors By Benjamin J. Keys; Neale Mahoney; Hanbin Yang
  6. The Financial Inclusion Landscape in the Asia-Pacific Region: A Dozen Key Findings By Sarwat Jahan; Jayendu De; Fazurin Jamaludin; Piyaporn Sodsriwiboon; Cormac Sullivan
  7. Parametric insurance and technology adoption in developing countries By Enrico Biffis; Erik Chavez; Alexis Louaas; Pierre Picard
  8. Networks, start-up capital and women's entrepreneurial performance in Africa: Evidence from Eswatini By Zuzana Brixiová; Thierry Kangoye
  9. Designing Strategies to Promote Investment of Family Remittances in Value Chains: A Toolkit By -

  1. By: Lwanga Elizabeth Nanziri (Newton International Fellow of the Royal Society and a British Academy Scholar.); Matthew Olckers (Research fellow at Monash University)
    Abstract: We analyse measures of financial literacy, included in the NIDS survey for the first time in Wave 5. South Africa follows patterns found in other countries. Less educated and low income respondents display low levels of financial literacy. Most countries have large gender gaps in financial literacy while the gender gap is absent in South Africa. Controlling for a number of socio-demographic variables, financial literacy is positively related to ownership of a pension and of mutual funds, stocks, or shares.
    Keywords: financial literacy, gender, pension, mutual funds
    Date: 2019
  2. By: Hiroshi FUJIKI
    Abstract: The adoption of crypto assets has been of great concern to policymakers ever since Facebook announced its proposed cryptocurrency, Libra, in mid-2019. Behind this concern lies the possibility of widespread Libra adoption for day-to-day transactions, bringing with it a set of serious risks related to money laundering, illicit financing, and consumer and investor protection. This study aims to investigate the demographic characteristics, financial literacy, financial behavior, three risky asset holdings, and the use of noncash payment methods among Japanese crypto asset adopters. To achieve these aims, probit models and multinomial logit models are applied. We find that Japanese crypto asset owners are more likely to be young and male and to have lower educational levels than non-owners. This is consistent with previous studies. The average relationship between crypto asset ownership and level of objective financial literacy is not found to be statistically significant; however, crypto asset owners' degree of understanding of crypto assets is associated with their level of objective financial literacy. Owners who indicate that they understand crypto assets to some extent tend to have better objective financial literacy, while owners who indicate that they do not understand crypto assets tend to have a lower level of objective financial literacy. A better understanding of crypto assets is also positively associated with earning profits from investing in them; however, objective financial literacy is not related to profiting from investment in crypto assets. Our results suggest that, in predicting the performance of an investment in crypto assets, specific knowledge of crypto assets is more important than objective financial literacy that captures general financial knowledge. Other notable findings of the study include the fact that crypto asset owners obtain information about economy and finance from mass media more frequently; that they are more experienced with financial troubles, such as bank transfer fraud or multiple debts; and that they are less credit card literate than non-owners, on average. They tend also to be more myopic, subject to herding, lacking in self-control, over-confident in their financial literacy, and less loss-averse than non-owners. Crypto asset owners' demographic characteristics are similar to those of the individuals who have experience investing in stocks, investment trusts, and foreign currency denominated money market funds. They are also demographically similar to those who use both crypto assets and one of the four payment methods?credit cards, electronic money, debit cards, and mobile payments via smartphones?rather than crypto assets alone.
    Date: 2020–07
  3. By: Zuzana Brixiová (University of Economics in Prague and VSB – Technical University of Ostrava, SALDRU Research Affiliate, University of Cape Town); Thierry Kangoye (African Development Bank); Mona Said (American University in Cairo)
    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
    Date: 2019
  4. By: Giulia Bettin (Universita' Politecnica delle Marche and MoFiR (IT)); Claudia Pigini (Universita' Politecnica delle Marche); Alberto Zazzaro (Universita' degli Studi di Napoli Federico II)
    Abstract: We estimate the causal e ect of Financial inclusion on transition probabilities into and out of poverty. By exploiting a longitudinal sample from the Bank of Italy's Survey on Household Income andWealth between 2002 and 2016, we find that financial inclusion is effective in both reducing the likelihood of falling into poverty and helping poor people to improve economic conditions and get out of their poverty status. According to our baseline estimates, the access to a deposit account actually reduces the risk of falling below the poverty line by 3 percentage points and increases the chance of exiting poverty by 5 percentage points. The significance and the magnitude of such effects are confirmed also when considering alternative proxies for financial inclusion (availability of debit/credit/pre-paid cards, use of remote banking services) and are robust to alternative empirical strategies (bivariate model with overidentifying restrictions) and to misspeci cation problems related to omitted factors, such as the level of household indebtedness.
    Keywords: poverty, financial inclusion, state dependence
    JEL: C23 D14 I32
    Date: 2020–07
  5. By: Benjamin J. Keys (The Wharton School and NBER); Neale Mahoney (University of Chicago - Booth School of Business and NBER); Hanbin Yang (Harvard Business School)
    Abstract: We use credit report data for a representative sample of 35 million individuals over 2000-2016 to examine consumer financial distress in the United States. We show there are large, persistent geographic disparities in consumer financial distress, with low levels in the Upper Midwest and high levels in the Deep South. To better understand these patterns, we conduct a "movers" analysis that examines how financial distress evolves when people move to places with different levels of financial distress. For collections and default, there is only weak convergence following a move, suggesting these types of financial distress are not primarily caused by place-based factors (such as local economic conditions, loan supply, and state laws) but instead reflect person-based characteristics (such as financial literacy and risk preferences). In contrast, for personal bankruptcy, we find a sizable place-based effect, which is consistent with anecdotal evidence on how local legal factors influence the bankruptcy filing decision. Individual characteristics determine whether you get into financial distress, while place-based factors determine whether you use bankruptcy to get out.
    Date: 2020
  6. By: Sarwat Jahan; Jayendu De; Fazurin Jamaludin; Piyaporn Sodsriwiboon; Cormac Sullivan
    Abstract: Financial inclusion is a multidimensional concept and countries have chosen diverse methods of enhancing financial inclusion with varying degrees of results. The heterogeneity of financial inclusion is particularly striking in the Asia-Pacific region as member countries range from those that are at the cutting edge of financial technology to others that are aiming to provide access to basic financial services. The wide disparity is not only inter-country but also intra-country. The focus of this paper is to take stock of the current state of financial inclusion in the Asia-Pacific region by highlighting twelve stylized facts about the state of financial inclusion in these countries. The paper finds that the state of financial inclusion depends on several factors, but a holistic approach calibrated to specific country conditions may lead to greater financial inclusion.
    Keywords: Financial inclusion;Financial services;Financial institutions;Financial infrastructure;Macroprudential policies and financial stability;Emerging Markets,Developing Asia,Pacific Islands,Asia-Pacific,Asia-Pacific region,financial development,Asia-Pacific country,financial service
    Date: 2019–04–19
  7. By: Enrico Biffis (Imperial College London); Erik Chavez (Imperial College London); Alexis Louaas (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique); Pierre Picard (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique)
    Abstract: Technology adoption is crucial for the development of low income countries. This paper investigates how parametric insurance can contribute to improving access to finance, and hence to technology, for smallholder farmers. In a model with moral hazard, we show that bundling para-metric insurance with loans may lower collateral requirements, thus promoting the financial inclusion of poor households. The case of agricultural input loans and weather-index insurance is studied in detail and related to bundled finance solutions recently piloted among smallholder farmers in Tanzania.
    Date: 2020–06–19
  8. By: Zuzana Brixiová (University of Economics in Prague and VSB – Technical University of Ostrava, SALDRU Research Affiliate, University of Cape Town); Thierry Kangoye (African Development Bank)
    Abstract: This paper analyzes the role of networks in the access of female entrepreneurs to start-up capital and firm performance in Eswatini, a country with one of the highest female unemployment rates in Africa. The paper first shows that higher initial capital is associated with better sales performance for both men and women entrepreneurs. Women entrepreneurs start their firms with smaller start-up capital than men and are more likely to fund it from their own sources, which reduces the size of their firm and sales level. However, women with higher education start their firms with more capital than their less educated counterparts. Moreover, women who receive support from professional networks have higher initial capital, while those trained in financial literacy more often access external funding sources, including through their networks.
    Keywords: Networks, start-up capital, women's entrepreneurship, multivariate analysis, Africa
    Date: 2019
  9. By: -
    Abstract: The purpose of this toolkit is to summarize the steps and activities used in the analysis and formulation of public policies to foster investment of family remittances in value chains, underpinned by greater financial inclusion, with the aim of facilitating their replication in other countries and other chains.
    Date: 2020–07–24

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