nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒10‒31
two papers chosen by

  1. The Long-Term Impact of High School Financial Education : Evidence from Brazil By Bruhn,Miriam; Garber,Gabriel; Koyama,Sergio; Zia,Bilal Husnain
  2. Fintech Entry, Firm Financial Inclusion, and Macroeconomic Dynamics in Emerging Economies By Federico S. Mandelman; Victoria Nuguer; Alan Finkelstein Shapiro

  1. By: Bruhn,Miriam; Garber,Gabriel; Koyama,Sergio; Zia,Bilal Husnain
    Abstract: In 2011, the impact of a comprehensive financial education program was studiedthrough a randomized controlled trial with 892 high schools in six Brazilian states. Using administrative data, thispaper follows 16,000 students for the next nine years. The short-term findings were that the treatment students usedexpensive credit and were behind on payments. By contrast, in the long-term, treatment students were less likely toborrow from expensive sources and to have loans with late payments than control students. Treatment students were alsomore likely to own microenterprises and less likely to be formally employed than control students.
    Date: 2022–07–26
  2. By: Federico S. Mandelman; Victoria Nuguer; Alan Finkelstein Shapiro
    Abstract: We build a model with a traditional banking system, endogenous entry of firms and fintech intermediaries, and firm heterogeneity in credit access and usage to study the credit-market, macroeconomic, and business cycle implications of the recent sizable growth in the number of fintech intermediaries in emerging economies. Our analysis delivers three findings. First, the impact of greater fintech entry on firm financial inclusion depends on whether greater entry is driven by lower entry costs for fintech intermediaries or lower barriers to fintech credit for unbanked firms. Second, greater fintech entry can have positive long-term macroeconomic effects. Third, greater fintech entry leads to a reduction in output volatility but results in greater relative volatility in bank credit and consumption. The effects of fintech entry on macro outcomes and volatility hinge critically on the interaction between domestic financial shocks and the reduction in fintech lending rates stemming from greater fintech entry. Unless greater fintech entry leads to lower fintech credit costs for firms, greater fintech entry will have no meaningful credit-market or business-cycle consequences.
    Keywords: financial access and participation; endogenous firm entry; banking sector; fintech entry; emerging economy business cycles
    JEL: E24 E32 E44 F41 G21
    Date: 2022–01–31

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