nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒05‒24
six papers chosen by

  1. Does lasting behavior change require knowledge change? Evidence from savings interventions for young adults By Horn, Samantha; Jamison, Julian C.; Karlan, Dean S.; Zinman, Jonathan
  2. The Impact of Financial Education of Managers on Medium and Large Enterprises - A Randomized Controlled Trial in Mozambique By Custódio, Cláudia; Mendes, Diogo; Metzger, Daniel
  3. Stereotypes in Financial Literacy: Evidence from PISA By Bottazzi, Laura; Lusardi, Annamaria
  4. Mobile technology supply factors and mobile money innovation: Thresholds for complementary policies By Asongu, Simplice A; Odhiambo, Nicholas M
  5. Financial planning & optimal retirement timing for physically intensive occupations By Edouard Ribes
  6. Les produits financiers peuvent-ils être transparents ? Discours de banques et de consommateurs By Eric Dehay; Nathalie Levy

  1. By: Horn, Samantha; Jamison, Julian C.; Karlan, Dean S.; Zinman, Jonathan
    Abstract: Is financial knowledge change necessary for lasting savings behavior change? Or, akin to the canonical Friedman billiards player, can behavior persist "as if" such knowledge is held? We randomize 240 Ugandan young-adult clubs to financial education, savings account access, both, or neither. Each education arm, but not the account-only arm, increases financial knowledge and trust in banks at one-year. But at five-years the knowledge effects disappear, and the trust effects diminish. Savings activity, wealth, and income increase at both one-year and five-years for all treatment arms, suggesting that knowledge change is unnecessary for lasting impacts on behavior and outcomes.
    Keywords: financial access; Financial Education; financial literacy; Savings
    JEL: D12 D91 O12
    Date: 2020–10
  2. By: Custódio, Cláudia; Mendes, Diogo; Metzger, Daniel
    Abstract: This paper studies the impact of a course in "Finance" for top managers of medium and large enterprises in Mozambique through a randomized controlled trial (RCT). Survey data and accounting data provide consistent evidence that managers change firm financial policies in response to finance education. The largest treatment ef- fect is on short-term financial policies related to working capital. Reductions in accounts receivable and inventories generate an increase in cash flows used to finance long-term investments. Those policy changes also improve the performance of the treated firms. Overall, our results suggest that relatively small and low-cost interventions, such as a standard executive education program in finance, can help firms to mitigate financial constraints and potentially affect economic development.
    Keywords: CEOs; Financial Education; financial literacy; Financing constraints; RCT
    JEL: D4 G30 J24 L25 M41 O16
    Date: 2020–09
  3. By: Bottazzi, Laura; Lusardi, Annamaria
    Abstract: We examine gender differences in financial literacy among high school students in Italy using data from the 2012 Programme for International Student Assessment (PISA). Gender differences in financial literacy are large among the young in Italy. They are present in all regions and are particularly severe in the South and the Islands. Combining the rich PISA data with a variety of other indicators, we provide a thorough analysis of the potential determinants of the gender gap in financial literacy. We find that parental background, in particular the role of mothers, matters for the financial knowledge of girls. Moreover, we show that the social and cultural environment in which girls and boys live plays a crucial role in explaining gender differences. We also show that history matters: Medieval commercial hubs and the nuclear family structure created conditions favorable to the transformation of the role of women in society, and shaped gender differences in financial literacy as well.
    Keywords: financial literacy; Gender; PISA
    JEL: D14 G53 J16 J24
    Date: 2020–11
  4. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: This study complements the extant literature by assessing how enhancing supply factors of mobile technologies affect mobile money innovations for financial inclusion in developing countries. The mobile money innovation outcome variables are: mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money. The mobile technology supply factors are: unique mobile subscription rate, mobile connectivity performance, mobile connectivity coverage and telecommunications (telecom) sector regulation. The empirical evidence is based on quadratic Tobit regressions and the following findings are established. There are Kuznets or inverted shaped nexuses between three of the four supply factors and mobile money innovations from which thresholds for complementary policies are provided as follows: (i) Unique adults? mobile subscription rates of 128.500%, 121.500% and 77.750% for mobile money accounts, the mobile used to send money and the mobile used to receive money, respectively; (ii) the average share of the population covered by 2G, 3G and 4G mobile data networks of 61.250% and 51.833% for the mobile used to send money and the mobile used to receive money, respectively; and (iii) a telecom sector regulation index of 0.409, 0.283 and 0.283 for mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money, respectively. Some complementary policies are discussed, because at the attendant thresholds, the engaged supply factors of mobile money technologies become necessary, but not sufficient conditions of mobile money innovations for financial inclusion.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    Date: 2021–05
  5. By: Edouard Ribes (CERNA i3 - Centre d'économie industrielle i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: On average, O.E.C.D. statistics 2 shows that 4 out of 10 workers in developed geographies occupy a "blue-collar" type of position. Since those professions are physically demanding and come with a toll on one's health (which in turns translate into additional healthcare expenses), the length of an individual's active period must be carefully weighted. This paper therefore offers a financial model (and its subsequent program) to help make such decisions. It notably shows that whilst most developed countries require individuals to work for about 40 years, early retirement is a suitable option when healthcare prices are high. This paper also shows that financial literacy has a significant impact on retirements behaviors. For those with a strong predilection for present consumption and little interest in savings and investments, retirement is not an option. In those cases, the financial pressure associated to the healthcare system translates into either an incentive for them to work until the end of their life or not to enter the labor market at all.
    Keywords: Health,Retirement,Financial planning
    Date: 2021–05–06
  6. By: Eric Dehay (RIME-Lab - Recherche Interdisciplinaire en Management et Économie Lab - ULR 7396 - UA - Université d'Artois - Université de Lille); Nathalie Levy
    Abstract: The theme is retail financial products for which there are many information asymmetries. We are studying the initiative taken in 2010 in the United Kingdom to simplify them. A statistical analysis of the discourse held on this occasion by financial institutions and consumers reveals two obstacles to simplification. The first is an economic one. It is about profitability and efficiency of the offer. The second is of a conceptual nature. It concerns the definition of what a simple product and the instance validating them are. This explains why the regulator acts on information and financial education rather than on products to increase market transparency.
    Abstract: La thématique est celle des produits financiers de détail pour lesquels les asymétries d'information sont importantes. Nous étudions l'initiative prise en 2010 au Royaume-Uni pour leur simplification. Une analyse statistique du discours tenu à cette occasion par les établissements financiers et consommateurs fait apparaître deux obstacles à la simplification. Le premier est d'ordre économique et concerne la rentabilité ou l'efficacité de l'offre. Le second est d'ordre conceptuel et concerne la définition même de la notion de produit simple ou l'instance les validant. Ils expliquent pourquoi le régulateur agit sur l'information et l'éducation financière plutôt que sur les produits pour faire progresser la transparence du marché.
    Date: 2020–10–13

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