nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒03‒22
five papers chosen by

  1. Digital Finance and Financial Literacy: An Empirical Investigation of Chinese Households By Yang, Junhong; Wu, Yu; Huang, Bihong
  2. The fintech gender gap By Sharon Chen; Sebastian Doerr; Jon Frost; Leonardo Gambacorta; Hyun Song Shin
  3. Gender Differences in Financial Advice By Tabea Bucher-Koenen; Andreas Hackethal; Johannes Koenen; Christine Laudenbach
  4. Why microfinance institutions go digital: An empirical analysis By Gregor Dorfleitner; Davide Forcella; Quynh Anh Nguyen
  5. Test Format and Calculator Use in the Testing of Basic Math Skills for Principles of Economics: Experimental Evidence By Irene R. Foster; Melanie Allwine Fennell

  1. By: Yang, Junhong (Asian Development Bank Institute); Wu, Yu (Asian Development Bank Institute); Huang, Bihong (Asian Development Bank Institute)
    Abstract: Using the 2015 and 2017 waves of the China Household Finance Survey, we measured financial literacy and study its relationship to households’ demand for digital finance. We found that a majority of households in the People’s Republic of China possess limited financial literacy. The low level of financial sophistication is responsible for the low usage of digital finance among Chinese households. Further, the positive impact of financial literacy on digital finance is more pronounced for wealthy, high-income, and young households, women, and households in urban and coastal areas. Our results are robust to using a variety of specifications and controlling for endogeneity, peer effects, cognition, and voluntary self-exclusion.
    Keywords: financial literacy; digital finance; household finance; CHFS; People’s Republic of China
    JEL: D10 D83 D91 G11
    Date: 2020–12–25
  2. By: Sharon Chen; Sebastian Doerr; Jon Frost; Leonardo Gambacorta; Hyun Song Shin
    Abstract: Fintech promises to spur financial inclusion and close the gender gap in access to financial services. Using novel survey data for 28 countries, this paper finds a large 'fintech gender gap': while 29% of men use fintech products and services, only 21% of women do. The gap is present in almost every country in our sample. Country characteristics and several individual-level controls explain about a third of the unconditional gap. Gender differences in the willingness to use new financial technology or fintech entrants if they offer cheaper services account for over half of the remaining gap. The paper concludes by suggesting potential explanations for the gender gap and implications for challenges in fostering financial inclusion with new technology.
    Keywords: fintech, gender, financial inclusion, personal data, privacy
    JEL: E51 J16 O32
    Date: 2021–03
  3. By: Tabea Bucher-Koenen; Andreas Hackethal; Johannes Koenen; Christine Laudenbach
    Abstract: We show that financial advisors recommend more costly products to female clients, based on minutes from about 27,000 real-world advisory meetings and client portfolio data. Funds recommended to women have higher expense ratios controlling for risk, and women less often receive rebates on upfront fees for any given fund. We develop a model relating these findings to client stereotyping, and empirically verify an additional prediction: Women (but not men) with higher financial aptitude reject recommendations more frequently. Women state a preference for delegating financial decisions, but appear unaware of associated higher costs. Evidence of stereotyping is stronger for male advisors.
    Keywords: credence goods, financial aptitude, consumer protection, financial literacy, discrimination
    JEL: G2 E2 D8
    Date: 2021–03
  4. By: Gregor Dorfleitner; Davide Forcella; Quynh Anh Nguyen
    Abstract: While the role of digital solutions to foster financial inclusion and the development of the microfinance sector are widely acknowledged, questions concerning the variation in the ability and willingness of microfinance institutions’ (MFIs) adoption of these tools remain unanswered. This paper studies the determinant of the use of digital support solutions in the microfinance sector by using a global sample of MFIs derived from a survey by YAPU Solutions on rural lending and IT solutions. We discover the evidence that suggests the adoption of these tools is consistent with the social performance of MFIs. Furthermore, the results of the study indicate that the profitability of the institutions is associated with a larger application of digital support solutions. Macroeconomic factors, the development of the country in which the institution is located, also impact MFIs’ decisions regarding integrating digital solutions into their services and internal operational processes.
    Keywords: Microfinance institutions; Fintech; Digital solutions; Social performance; Digitization
    JEL: G21 O33
    Date: 2021–03–17
  5. By: Irene R. Foster (George Washington University); Melanie Allwine Fennell (Randolph-Macon College)
    Abstract: Results from an experiment in Fall 2013 of 902 incoming students at this university are reported. In this experiment, after students were given a basic math assessment to ensure they had the necessary math skills to take a principles of economics course, they were randomly allocated to a treatment or control group to test if there was a significant impact of test format, calculator use, and calculator type on students’ scores. The interaction of calculator use/type and test format was also tested. The results from this experiment suggest that each treatment had a significant positive impact on students’ assessment scores, with much variation depending on the type of question asked and the level of performance.
    Keywords: Economic Education, Teaching Economics, Math Assessment, Microeconomics, Calculator Use, Test Format
    JEL: A22 C23
    Date: 2020

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