nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒01‒04
five papers chosen by

  1. Italian people’s financial literacy: the results of the Bank of Italy’s 2020 survey By Giovanni D’Alessio; Riccardo de Bonis; Andrea Neri; Cristiana Rampazzi
  2. Retail Investing in Passive Exchange Traded Funds By D'Hondt, Catherine; Elhichou Elmaya, Younes; Petitjean, Mikael
  3. Financial Inclusion in Romania By World Bank
  4. Neighbourhood-level variation in the risk of private credit default: A driver of urban residential segregation? By Neumann, Uwe; Schaffner, Sandra
  5. Information Technology and Gender Economic Inclusion in Sub-Saharan Africa By Simplice A. Asongu; Joseph Amankwah†Amoah; Rexon T. Nting; Godfred A. Afrifa

  1. By: Giovanni D’Alessio (Banca d'Italia); Riccardo de Bonis (Banca d'Italia); Andrea Neri (Banca d'Italia); Cristiana Rampazzi (Banca d'Italia)
    Abstract: The paper analyses the results of the survey on the financial literacy of Italian adults, conducted by the Bank of Italy in early 2020. In line with the OECD’s methodology, the financial literacy indicator is the sum of the scores calculated for three factors: knowledge, behaviour and attitudes. The survey confirms that Italy lags behind by international standards, as already noted in the 2017 survey. Compared with 2017, the new survey shows that Italian people’s financial knowledge has improved, while their behaviour and attitudes have essentially remained stable. Financial literacy varies among the population according to the education levels – the most significant variable – gender, age and geographical location of those interviewed. An econometric analysis focused on knowledge – the most reliable component – shows that Italians can be divided into four groups, characterized by increasingly high levels of financial knowledge: excluded, incompetent, competent and expert. Between 2017 and 2020, the number of excluded and incompetent individuals in the population has decreased, whereas that of competent, and to a lesser extent, of expert individuals has increased.
    Keywords: financial literacy; knowledge, behaviour and attitudes; Survey on Household Income and Wealth (SHIW)
    JEL: G53 A20 I20
    Date: 2020–12
  2. By: D'Hondt, Catherine (Université catholique de Louvain, LIDAM/LFIN, Belgium); Elhichou Elmaya, Younes (Université catholique de Louvain, LIDAM/LFIN, Belgium); Petitjean, Mikael (Université catholique de Louvain, LIDAM/LFIN, Belgium)
    Abstract: Using a large set of trading accounts, we study the determinants of retail investing in passive Exchange Traded Funds (P-ETFs). Controlling for investor characteristics related to their risk-return profile, trading activity, and socio-demographics, we show that the probability and magnitude of P-ETF investing by retail investors can be explained by financial knowledge, financial experience, and behavioral biases such as overconfidence and local bias. We also show that the more active P-ETF users hold a lower number of stocks and modify the composition of their stock portfolio less extensively, pointing to a substitution effect between stocks and P-ETFs.
    Keywords: Behavioral biases, ETFs, Financial literacy, Passive investing, Retail investors
    JEL: G11 G40 G53
    Date: 2020–01–21
  3. By: World Bank
    Keywords: Finance and Financial Sector Development - Access to Finance Finance and Financial Sector Development - Banks & Banking Reform Finance and Financial Sector Development - Financial Intermediation Finance and Financial Sector Development - Microfinance Finance and Financial Sector Development - Public & Municipal Finance Finance and Financial Sector Development - Rural Finance
    Date: 2020–03
  4. By: Neumann, Uwe; Schaffner, Sandra
    Abstract: Credit default is a dramatic consequence of disadvantageous private financial decisions. Using regression methods which eliminate spatial autocorrelation at the level of 1 km2 grids and further identification problems, we observe considerable and reinforcing residential segregation between households facing payment difficulty and more solvent households. Two findings give reasons for concern. First, data from North Rhine-Westphalia reveals that a high local risk of credit default coincides with a lower share of children taking the highest German secondary school track (Gymnasium). Since birth rates are currently high in these (inner city) areas, the outlook on educational attainment for many pupils is bleak. Second, hedonic price estimations using microdata on housing offers find that local agglomeration of households facing credit default provokes significant (detrimental) neighbourhood effects on housing markets. Segregation is thus unlikely to diminish, which implies increased efforts should be made to overcome unfavourable neighbourhood effects in various fields of policy, especially education.
    Keywords: segregation,credit default,financial literacy,spatial autocorrelation,hedonic price analysis
    JEL: R23 R21 G51
    Date: 2020
  5. By: Simplice A. Asongu (Yaounde, Cameroon); Joseph Amankwah†Amoah (University of Kent, Kent, UK); Rexon T. Nting (University of Wales, London, UK); Godfred A. Afrifa (University of Kent, Kent, UK)
    Abstract: This study investigates how ICT affects gender economic inclusion via gender parity education channels. We examine the issue using data from 49 countries in sub-Saharan Africa for the period 2004-2018 divided into: (i) 42 countries for the period 2004-2014; and (ii) 49 countries for the period 2008-2018. Given the overwhelming evidence of negative net effects in the first sample, an extended analysis is used to establish thresholds of ICT penetration that nullify the established net negative effects. We found that in order to enhance female labor force participation, the following ICT thresholds are worthwhile for the secondary education channel: 165 mobile phone penetration per 100 people, 21.471 internet penetration per 100 people and 3.475 fixed broadband subscriptions per 100 people. For the same outcome of inducing a positive effect on female labor force participation, a 31.966 internet penetration per 100 people threshold, is required for the mechanism of tertiary school education. These computed thresholds have economic meaning and policy relevance because they are within the established ICT policy ranges. In the second sample, a mobile phone penetration threshold of 122.20 per 100 people is needed for the tertiary education channel to positively affect female labor force participation.
    Keywords: Africa; ICT; Gender; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2020–01

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