nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2020‒09‒28
four papers chosen by

  1. Gender differences in risky asset behavior: the importance of self-confidence and financial literacy By Andrej Cupák; Pirmin Fessler; Alyssa Schneebaum
  2. Financial Inclusion and Poverty Transitions: An Empirical Analysis for Italy By Giulia Bettin; Claudia Pigini; Alberto Zazzaro
  3. Understanding the greater diffusion of mobile money innovations in Africa By Simplice A. Asongu; Nicholas Biekpe; Danny Cassimon
  4. Recovery from the Pandemic Crisis : Balancing Short-Term and Long-Term Concerns By Loayza,Norman V.; Sanghi,Apurva; Shaharuddin,Nurlina Binti; Wuester,Lucie Johanna

  1. By: Andrej Cupák (Research Department, National Bank of Slovakia); Pirmin Fessler (Foreign Research Division, Oesterreichische Nationalbank); Alyssa Schneebaum (Department of Economics, Vienna University of Economics and Business)
    Abstract: Women are less likely than men to hold risky financial assets, a fact that has often been attributed to differences in risk aversion and, more recently, to differences in financial literacy and investor confidence. This paper studies the role of individuals’ confidence in their own financial literacy in explaining the gender gap in investment in risky assets, while controlling for actual financial literacy and a measure of risk aversion. It is the first paper to assess the role of confidence independent of actual financial knowledge for a large set of countries and it is the first to explore the role of confidence by using counterfactual decomposition techniques. Results from our analysis confirm recent findings of modern behavioral finance: confidence is a strong determinant of risky financial behavior and accounts for a large part of the gender gap.
    Keywords: self-confidence, financial literacy, financial behavior, gender, decomposition
    JEL: D14 D91 I20 G11
    Date: 2020–09
  2. By: Giulia Bettin (Università Politecnica delle Marche and MoFiR); Claudia Pigini (Università Politecnica delle Marche and MoFiR); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: We estimate the causal effect 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 and Wealth between 2002 and 2016, we find that financial inclusion is effective in both reducing the likelihood of falling into poverty and helping the poor to improve their economic condition and climb out of poverty. According to our baseline estimates, 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 magnitude of such effects are also confirmed 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 misspecification problems related to omitted factors, such as the level of household indebtedness.
    Keywords: Employment, relationship banking, insurance
    JEL: C23 D14 I32
    Date: 2020–09–10
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas Biekpe (Cape Town, South Africa); Danny Cassimon (University of Antwerp, Belgium)
    Abstract: The present research extends Lashitew, van Tulder and Liasse (2019, RP) in order to understand the greater diffusion of mobile money innovations in Africa. To make this assessment, a comparative analysis is engaged between sampled African countries and the corresponding sampled developing countries. Three main types of predictor groups are used for the study, namely: demand, supply and macro-level factors. The empirical evidence is based on Tobit regressions. The tested hypothesis is confirmed because from a comparative analysis between African-specific estimates and those of the sampled countries, not all factors driving mobile money innovations in Africa are apparent in the findings of Lashitew et al. (2019). An extended analysis is also performed to take on board the concern of multicollinearity from which, the best estimators from the study are derived. Comparative findings from correlation analysis show that an African specificity is largely traceable to the ‘unique mobile subscription rate’ variable. An in-depth empirical analysis further confirms an African specificity in the outcome variables (especially in the mobile used to send/receive money) which, may be traceable to informal sector variables not documented in Lashitew et al. (2019). Scholarly and policy implications are discussed.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2020–01
  4. By: Loayza,Norman V.; Sanghi,Apurva; Shaharuddin,Nurlina Binti; Wuester,Lucie Johanna
    Abstract: The COVID-19 (coronavirus) pandemic crisis combines the worst characteristics of previous crises. It features a simultaneous supply and demand shock; domestic, regional, and global scope; a projected long duration; and a high degree of uncertainty. What can be expected for recovery from the pandemic crisis across the world? This brief first assesses the projections of economic activity in 2020 and 2021 and the domestic and international conditions that will constrain and drive a possible recovery. It then discusses the potential shapes of the recovery (or lack thereof) for specific country conditions. Finally, it explores the need to balance short-term and long-term concerns, arguing in favor of policies that focus on sustained recovery, rather than quick but debt-fueled and short-lived gains. Drawing on the lessons from past crises, the brief concludes that sustained economic recovery is possible only when the underlying causes are addressed and the foundations of growth are protected. For the pandemic crisis, this implies mitigating the spread of the disease to manageable levels while keeping the economy sufficiently active. In the short term, economic policy should focus on preventing further poverty, averting unnecessary business closures, and avoiding lasting damage to human capital and productivity. In the long term, policy reform should address the structural vulnerabilities that the pandemic crisis has exposed. This includes reforms to expand labor and business formalization; to improve the coverage and adequacy of social protection; to extend financial inclusion to elderly, rural, and poor people; to promote digital transformation across society; and, most basically, to improve access to and quality of public health care.
    Keywords: Health Care Services Industry,International Trade and Trade Rules,Public Health Promotion,Pulp&Paper Industry,Food&Beverage Industry,Plastics&Rubber Industry,Business Cycles and Stabilization Policies,Common Carriers Industry,Textiles, Apparel&Leather Industry
    Date: 2020–09–07

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