nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒05‒10
five papers chosen by

  1. Fearless Woman: Financial Literacy and Stock Market Participation By Alessie, Rob; Bucher-Koenen, Tabea; Lusardi, Annamaria; Van Rooij, Maarten
  2. Closing the Gender Profit Gap By Batista, Catia; Sequeira, Sandra; Vicente, Pedro C
  3. Evaluating Deliberative Competence: A Simple Method with an Application to Financial Choice By Ambuehl, Sandro; Bernheim, B. Douglas; Lusardi, Annamaria
  4. Promoting female economic inclusion for tax performance in Sub-Saharan Africa By Asongu, Simplice; Adegboye, Alex; Nnanna, Joseph
  5. Information Technology and Gender Economic Inclusion in Sub-Saharan Africa By Asongu, Simplice; Amankwah‐Amoah, Joseph; Nting, Rexon; Afrifa, Godfred

  1. By: Alessie, Rob; Bucher-Koenen, Tabea; Lusardi, Annamaria; Van Rooij, Maarten
    Abstract: Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond "do not know" to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women's lower confidence levels. Both financial knowledge and confidence explain stock market participation.
    Keywords: confidence; financial decision making; financial knowledge; finite mixture model; Gender Gap; latent class model; Measurement error
    JEL: C81 D91 G53
    Date: 2021–03
  2. By: Batista, Catia; Sequeira, Sandra; Vicente, Pedro C
    Abstract: We examine the complementarity between access to mobile savings accounts and improved financial management skills on the performance of female-led micro-enterprises in Mozambique. This combined support is associated with a large increase in both short and long-term firm profits and in financial security, when compared to the independent effect of each of these interventions. This support allowed female-headed micro-enterprises to close the gender gap in performance and financial literacy relative to their male counterparts. The main drivers of improved business performance are increased financial management practices (bookkeeping), an increase in accessible savings and reduced transfers to friends and relatives.
    Date: 2021–03
  3. By: Ambuehl, Sandro; Bernheim, B. Douglas; Lusardi, Annamaria
    Abstract: We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.
    JEL: C91 D04 D14 D60 D91 I21
    Date: 2021–03
  4. By: Asongu, Simplice; Adegboye, Alex; Nnanna, Joseph
    Abstract: This study explores whether female economic inclusion enhances tax performance in a sample of 48 countries in Sub-Saharan Africa from 2000 to 2018. The study’s empirical evidence is based on the generalized method of moments in order to account for endogeneity concerns. Three tax performance measurements are used, notably, total taxes revenue excluding social contributions, reported tax revenue derived from natural resources sources, and total non-resource tax revenue. Three female inclusion indicators are used, namely, female employment in industry, female labour force participation, and female employment. The following empirical evidences are documented; (i) There is a negative net effect from the enhancement of female employment in the industry on the total tax revenue. (ii) There is a positive net effect of female employment in the industry on the non-resource taxes. An extended threshold analysis is performed to establish the critical masses that could further influence tax performance positively. The following thresholds are established. (i) a minimum of 15.35 “employment in industry, female (% of female employment)” for the total tax revenue and (ii) a maximum of 23.75 “employment in industry, female (% of female employment)” for the non-resource tax revenue. These critical masses are crucial for sustainable development because, below or beyond these thresholds, policy makers should complement the female economic inclusion with other economic measures designed to improve tax performance in Sub-Saharan Africa.
    Keywords: Gender, economic inclusion, tax performance, sustainable development, Africa
    JEL: H20 H71 I21 I28 J08
    Date: 2020–01
  5. By: Asongu, Simplice; Amankwah‐Amoah, Joseph; Nting, Rexon; Afrifa, Godfred
    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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