nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2023‒06‒19
eight papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Financial Education: At the Financial Literacy and Education Commission Public Meeting, Financial Literacy and Education Commission, Washington, DC (via webcast) November 17th 2022 By Michelle W. Bowman
  2. The role of financial inclusion in moderating the incidence of entrepreneurship on energy poverty in Ghana By Simplice A. Asongu; Nicholas M. Odhiambo
  3. Does Financial Inclusion Enhance Tax Revenue: Indian Experience By Surender Kumar; Paramjit Author-Department of Economics, Delhi School of Economics
  4. Financial Literacy, Experimental Preference Measures and Field Behavior – A Randomized Educational Intervention By Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim; Sebastian O. Schneider
  5. Determinants of Financial Inclusion in Africa and OECD Countries By Evzen Kocenda; Samuel Fiifi Eshun
  6. Nigeria’s eNaira, One Year After By Jookyung Ree
  7. Role of ICT Dissemination and Digital Finance in Poverty Eradication and Income Inequality Reduction: A Sub-national Level Study from India By Simontinti Das; Amrita Chatterjee
  8. Short-term and long-term effects of cash for work: Evidence from a randomized controlled trial in Tunisia By Leight, Jessica; Mvukiyehe, Eric

  1. By: Michelle W. Bowman
    Date: 2022–11–17
  2. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This paper assesses the role of financial inclusion in moderating the incidence of entrepreneurship on energy poverty in Ghana. The assessment is made by using pooled data and two stage least squares. The exposition builds from the 7th (GLSS7) and 6th (GLSS6) rounds focusing on the Ghana Living Standards Survey (GSS, 2014, 2019) that is collected by the Ghana Statistical Service (GSS) from ten principal regions in the country. The findings show that entrepreneurship has an unconditional positive incidence on energy poverty while the interactive incidence between entrepreneurship and financial inclusion on energy poverty is negative. The corresponding financial inclusion policy thresholds that should be exceeded in order for financial inclusion to effectively moderate entrepreneurship for negative outcomes in energy poverty: (i) are between 0.154 and 0.280 index for the full sample; (ii) is between 0.187 index for the rural sub-sample; (iii) are between 0.200 and 0.333 index for the male sample. (iv) Thresholds are not computed for the rural and female sub-samples because at least one estimated coefficient that is needed for the computation of such thresholds is not significant. Policy implications are discussed. This study has complemented the existing literature by assessing how financial inclusion can be employed to influence the nexus between entrepreneurship and poverty in Ghana.
    Keywords: Energy poverty; Financial inclusion; Consumption poverty; Education; Household income
    JEL: D03 D12 D14 I32 Q41
    Date: 2023–01
  3. By: Surender Kumar (Department of Economics, Delhi School of Economics); Paramjit Author-Department of Economics, Delhi School of Economics
    Abstract: The Government of India has taken several initiatives to enhance financial inclusion in the country. It is hypothesized that financial inclusion augments tax revenue through increased business development and private consumption. This paper uses panel data structural break methods to comprehend the effectiveness of the schemes launched in the last decade. It also estimates a causal relationship between tax revenue and financial inclusion using the dynamic Generalised Method of Moments (GMM). The study finds structural breaks in the relationship between tax revenue and deposit or credit account rates in 2014, which concurs with the launch of PMJDY. The PM MUDRA scheme was launched in 2015, and the 95% confidence level in the estimated structural breaks was in the period of [2013 2015]. These structural breaks reveal the effectiveness of the recent financial inclusion steps taken by the Indian government. Another significant finding is that all the pre-break and post-break coefficients of financial inclusion indicators are statistically significant that reflect the effectiveness of the policies in meeting the targeted objectives. The government should strengthen the ongoing measures of financial inclusion for eliminating financial untouchability and augmenting states’ fiscal capacity. Key Words: Financial inclusion, Tax-revenue-SGDP ratio, Structural breaks; PMJDY, PM MUDRA JEL Classification: C13; O16; G21; G28, G15
    Date: 2023–05
  4. By: Matthias Sutter; Michael Weyland; Anna Untertrifaller; Manuel Froitzheim; Sebastian O. Schneider
    Abstract: We present the results of a randomized intervention to study how teaching financial literacy to 16-year old high-school students affects their behavior in risk and time preference tasks. Compared to two different control treatments, we find that teaching financial literacy makes subjects behave more patiently, more time-consistent, and more risk-averse. These effects persist for up to almost 5 years after our intervention. Behavior in the risk and time preference tasks is related to financial behavior outside the lab, in particular spending patterns. This shows that teaching financial literacy affects economic decision-making which in turn is important for field behavior.
    Keywords: financial literacy, randomized intervention, risk preferences, time preferences, financial behaviour, field experiment
    JEL: C93 D14 I21
    Date: 2023
  5. By: Evzen Kocenda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague; Institute of Information Theory and Automation of the CAS, Prague; CESifo Munich; IOS Regensburg.); Samuel Fiifi Eshun (Institute of Economic Studies, Charles University, Prague, Czech Republic.)
    Abstract: Using a dynamic panel data analysis, we explore the factors influencing financial inclusion in Sub-Saharan Africa (SSA) and countries belonging to the Organization for Economic Co-operation and Development (OECD). We employ the System Generalized Method of Moments (GMM) estimator and assess 31 SSA and 38 OECD countries from 2000-2021. We found that the differences in trade openness, banks' efficiency, income, and remittances are some macro-level factors that explain the variation in financial inclusion levels. We highlight the importance of quality literacy policies, trade improvement with restrictions on cross-border capital flows, and a more efficient financial system to promote financial inclusion.
    Keywords: Financial Inclusion, Financial Inclusion Index, Sub-Saharan Africa (SSA), Organization for Economic Co-operation and Development (OECD), System Generalized Methods of Moments (GMM)
    JEL: C23 E44 F65 G21 O16 O57
    Date: 2023–05
  6. By: Jookyung Ree
    Abstract: This paper reflects on the first year of the eNaira—the first CBDC in Africa. Despite the laudable undisrupted operation for the first full year, the CBDC project has not yet moved beyond the initial wave of limited adoption. Network effects suggest the initial low adoption spell will require a coordinated policy drive to break it. The eNaira’s potential in financial inclusion requires a strategy to set the right relationship with mobile money, given the former’s potential to either complement or substitute the latter. Cost savings from integrating CBDC—as a bridge vehicle—in the remittance process may also be substantial.
    Keywords: Central Bank Digital Currency; financial inclusion; remittance; blockchain; mobile money
    Date: 2023–05–16
  7. By: Simontinti Das (Assistant Professor, Jadavpur University, Kolkata); Amrita Chatterjee ((Corresponding author), Assistant Professor, Madras School of Economics, Chennai, India)
    Abstract: Information and Communication technology (ICT) can boost economic growth and at the same time can create digital divide. The present paper explores both direct impact of ICT dissemination and its indirect impact through the channel of digital finance on poverty eradication and income inequality reduction at the sub-national level in India, considering rural-urban bifurcation. States are classified according to the incidence of poverty and income inequality. Ordered probit estimation confirms that the spread of ICT dissemination directly reduces the persistence of poverty in both urban and rural areas. Moreover, the application of ICT innovation in the financial sector or digital finance also has a positive impact on poverty eradication. However, in case of inequality removal, ICT innovation has no direct impact, though financial inclusion reduces inequality in both rural and urban areas. Interestingly, ICT diffusion in the banking sector dampens the positive role of financial inclusion on urban inequality reduction, whereas it has no impact on rural inequality. An important policy prescription should be strengthening ICT infrastructure along with a wider and uniform spread of digital finance among rural as well as urban populations so that more people can take advantage of ICT diffusion.
    Keywords: ICT innovation, Digital Finance, Poverty incidence, Income inequality, Rural-urban disparity
    JEL: O33 G2 I32 O18 R12
  8. By: Leight, Jessica; Mvukiyehe, Eric
    Abstract: While a growing literature analyzes the economic effects of cash for work programs in developing countries, there remains little evidence about the longer-term effects of these interventions. This paper presents findings from a randomized controlled trial evaluating a three month intervention providing public works em ployment in rural Tunisia. The evaluation design incorporates two dimensions of randomization — community-level randomization to treatment and control, and individual-level randomization among eligible individuals — and a sample of 2, 718 individuals was tracked over five years. The findings suggest that cash for work leads to significant increases in labor market engagement, assets, consumption, financial inclusion, civic engagement, psychological well being, and women’s em powerment one-year post-treatment; however, these effects have largely attenuated to zero five years post-treatment, with the exception of a positive effect on assets. There is also evidence of positive spillover effects within treatment communities, but these effects similarly attenuate over time.
    Keywords: TUNISIA; NORTH AFRICA; AFRICA; economics; public works; employment; rural areas; cash flow; cash transfers; labour market; public participation; assets; developing countries; finance; gender equity; women; randomized controlled trial
    Date: 2023

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