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on Financial Literacy and Education |
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Issue of 2024‒10‒14
six papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Maarten van Rooij; Rob Alessie; Annamaria Lusardi |
| Abstract: | This paper surveys what we have learned on financial literacy and its relation to financial behavior from data collected in the Dutch Central Bank (DNB) Household Survey, a project done in collaboration with academics. A pioneering survey fielded in 2005 included an extensive set of financial literacy questions and questions that can serve as instruments for financial literacy in regression analyses to assess the causal effect of financial literacy on behavior. We describe how this survey spurred a series of research papers demonstrating the crucial role of financial literacy in stock market participation, retirement planning, and wealth accumulation. This inspired various follow-up studies and experiments based on new data collections in the DNB Household Survey. Researchers worldwide have used these data for innovative studies, and other surveys have included similar questions. This case study exemplifies the essential role of data in empirical research, showing how innovative data collections can inspire new research initiatives and significantly contribute to our understanding of household financial decisionmaking. |
| Keywords: | financial literacy; consumer financial decision-making; household finance; survey methodology; data collection methods; empirical analysis; |
| JEL: | G53 D14 D12 C81 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:dnb:dnbwpp:815 |
| By: | Simplice A. Asongu (Johannesburg, South Africa); Amarachi O. Ogbonna (Yaoundé, Cameroon); Mariette C. N. Mete (Yaoundé, Cameroon) |
| Abstract: | The present research extends the extant literature by investigating the hypothesis on whether marriage can be a substitute for financial inclusion in energy poverty reduction in Ghana. Pooled data and two stage least squares techniques are used in the estimation process and the validity of the tested hypothesis (i.e., that marriage is a substitute for financial inclusion in energy poverty mitigation) is based on two main criteria: (i) a positive interactive effect relative to the negative unconditional effect of marriage; (ii) a marriage net effect lower in magnitude compared to the unconditional effect of marriage and (iii) an insignificant interactive effect when both unconditional effects are negative. The investigated hypothesis is not valid in the full sample, urban sub-sample and female sub-sample while it is valid in the rural and male sub-samples. Policy implications are discussed. |
| Keywords: | Energy poverty; financial inclusion; consumption poverty; education; household income |
| JEL: | D03 D12 D14 I32 Q41 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:aak:wpaper:24/007 |
| By: | Aurazo, Jose; Gasmi, Farid |
| Abstract: | Digitization of retail payments has facilitated the promotion of financial inclusion recognized to stimulate growth, alleviate poverty, and address gender disparities in the financial sector. This paper closely examines four prominent payment solutions in the developing world, which are M-Pesa in Kenya, UPI in India, Pix in Brazil, and Yape in Peru. We employ a descriptive approach to identify the main factors that have contributed to the success of these digital payment systems, focusing on the role played by: i) private digital platforms developers and providers; ii) regulators and central banks and iii) the degree of the payment system interoperability. Although, to some extent, these varied experiences suggest that there is no one-size-fits-all solution, they highlight the necessity of active public-private sector cooperation and placing the end user at the center of such initiatives. |
| Keywords: | Digital payments; Financial inclusion; Interoperability; Regulation. |
| JEL: | G23 G28 L51 L96 O16 R11 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129719 |
| By: | Amado Morales, Laura G. (Universidad de los Andes) |
| Abstract: | During the Covid-19 pandemic, the Colombian government established the use of Digital Cash Transfers as a way to mitigate the impact of the economic crisis on the most poor and vulnerable of the Colombian population. Using data from Daviplata, one of the channels the government used to deliver the Digital Cash Transfers, I examine the effect that receiving these transfers had on financial deepening. My findings suggest that receiving a cash transfer via Daviplata increased financial deepening, through an increase in savings and an increase in the average number of transactions made by the user. However, this financial deepening did not translate into the access to a broader portfolio of financial products and services. Following an Difference-in-Differences Event Studies approach, I find that receiving a Digital Cash Transfer (DCT) had an effect on increasing savings in $24, 309, a quite large effect compared to average monthly savings for the targeted population. In terms of transactions, receiving a DCT via Daviplata had an effect of 0.1362, which represents an increase of about 20% compared to the number of average transactions made by the users. |
| Keywords: | Financial Inclusion; Financial Deepening; Cash Transfers; Digital Financial Institutions; Savings Behavior. |
| JEL: | G21 H53 I38 O16 |
| Date: | 2024–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021195 |
| By: | Claire Greene; Fumiko Hayashi; Alicia Lloro; Oz Shy; Joanna Stavins; Ying Lei Toh |
| Abstract: | US households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering four key elements—access, use, safety, and affordability—and discuss how researchers may assess these elements to quantify the share of households underserved in digital payments. |
| Keywords: | digital payments; underserved; fintech; financial inclusion; nonbanks |
| JEL: | D12 D18 G21 G23 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:98803 |
| By: | Simplice A. Asongu (Yaoundé, Cameroon); Therese E. Zogo (Yaoundé, Cameroon); Mariette C. N. Mete (Yaoundé, Cameroon); Barbara Deladem Mensah (Yaoundé, Cameroon) |
| Abstract: | The present study assesses the relevance of microfinance institutions (MFIs) in the effect of financial access on gender economic inclusion in 44 countries in Sub-Saharan Africa (SSA) for the period 2004 to 2018. The adopted empirical strategy is interactive quantile regressions that are tailored to account for both simultaneity and unobserved heterogeneity. Two MFIs dynamics are employed: MFIs per 1000km2 and MFIs per 100 000 adults. Financial access is measured in terms of female ownership of bank accounts while gender inclusion is in terms of reducing female unemployment. MFIs per 1000 km2 must reach thresholds of between 2.328 and 2.490 at the 90th quantile of the female unemployment distribution in order for female ownership of bank account to reduce female unemployment. The partial validity of the tested hypothesis is clarified and policy implications are discussed. |
| Keywords: | Africa; Microfinance; Gender; Inclusive development |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:aak:wpaper:24/009 |