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on Financial Literacy and Education |
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Issue of 2020‒09‒21
two papers chosen by |
| By: | Nicole Jonker; Anneke Kosse |
| Abstract: | The entry of Big Tech firms in the financial ecosystem might affect financial stability through the opportunities and challenges they create for financial inclusion. In this paper we survey the literature to determine the effectiveness of financial education in improving financial literacy and financial inclusion and to assess the impact of financial inclusion on financial stability. Based on our findings, we argue that new empirical research is needed to determine whether financial education can play a role in ensuring that everyone is able to reap the financial-inclusion benefits that Big Tech may bring. We also conclude that financial-inclusion opportunities created by Big Tech might potentially introduce risks for overall financial stability. Because of this, we underline the importance of proper supervision and regulation. |
| Keywords: | Development economics; Digital currencies and fintech; Financial markets; Financial services; Financial stability |
| JEL: | D92 G23 O16 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:20-32&r=all |
| By: | Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim |
| Abstract: | We present the results of a randomized intervention in schools to study how teaching financial literacy affects risk and time preferences of adolescents. Following more than 600 adolescents, aged 16 years on average, over about half a year, we provide causal evidence that teaching financial literacy has significant short-term and longer-term effects on risk and time preferences. Compared to two different control treatments, we find that teaching financial literacy makes subjects more patient, less present-biased, and slightly more risk-averse. Our finding that the intervention changes economic preferences contributes to a better understanding of why financial literacy has been shown to correlate systematically with financial behavior in previous studies. We argue that the link between financial literacy and field behavior works through economic preferences. In our study, the latter are also related in a meaningful way to students’ field behavior. |
| Keywords: | financial literacy, randomized intervention, risk preferences, time preferences, field experiment |
| JEL: | C93 D14 I21 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8489&r=all |