nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2021‒10‒04
two papers chosen by

  1. The welfare effects of financial inclusion in Ghana: An exploration based on a multidimensional measure of financial inclusion By Abdul Malik Iddrisu; Michael Danquah
  2. The Heterogeneous Relationship Between Financial Education and Investment Behavior in Japan By Hiroko Araki; Juan Nelson Martinez Dahbura

  1. By: Abdul Malik Iddrisu; Michael Danquah
    Abstract: Using a nationally representative household survey data set from Ghana, this paper provides empirical evidence regarding the role of financial inclusion or financial exclusion in household welfare. We first compute a multidimensional index of financial inclusion, and then we examine the effect of financial inclusion on household welfare. The study finds that households suffering financial deprivation have lower welfare compared with their financially included counterparts.
    Keywords: Financial inclusion, Household welfare, Ghana, Exclusion, Deprivation
    Date: 2021
  2. By: Hiroko Araki (Faculty of Economics Keio University); Juan Nelson Martinez Dahbura (Data Scientist)
    Abstract: This research employs data from Japan to study the relationship between the experience of financial education and the participation of Japanese persons on financial markets. We account for unobserved heterogeneity by employing a three-class Finite Mixture Model. The prior probability of class membership is a function of sociodemographic characteristics of the person. We examine the association between the investment experience probability conditional on class membership, and the experience of financial education at home, school and the workplace, controlling for a financial literacy score measured through Item Response Theory, and several behavioral traits. The results allow us to extract a segment of striving persons whose investment behavior differs in important ways from other groups. Education at school or work is significantly associated with higher investment probabilities across all classes of individuals. The impact of financial education at home is more heterogeneous, and may be negative for the most fragile groups. We believe that our results may offer important insights for policy-makers involved in the design of financial education programs.
    Keywords: Personal Financial Decision, Financial Education, Financial Literacy, Finite Mixture Model
    JEL: G02 D14
    Date: 2021–09–03

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.