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on Financial Literacy and Education |
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Issue of 2025–01–27
fourteen papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Mishra, Mukesh Kumar |
| Abstract: | The study evaluates the current status of financial literacy and retirement planning trends in Saharsa district in Bihar through an empirical study. This study aims to examine the relationship between retirement benefits and saving behaviour after analysed a sample of 384 respondents to design a model that examines the relationship between retirement planning and financial literacy trends. The study reveals that behavioural, socio-economic, and financial factors significantly influence investment decisions, with financial literacy and risk also positively impacting these decisions. Financial literacy in India emerged in the 21st century, aiming to improve capital formation through saving and investment among rural households through a well-planned and promoted approach. The knowledge and abilities needed to manage financial resources in developing sectors are referred to as financial literacy. It improves abilities for more effective financial management and development economics policymaking. In welfare economics, this study investigates the connection between literacy and inclusion. The study in Saharsa district in Bihar reveals a significant lack of financial literacy and inclusion among the population, with varied attitudes and behaviours. Findings indicate that Respondents have low awareness of Retirement and Estate Planning, and feel their personal financial plans are imbalanced, requiring expert management and PMJDY is an important instrument for assessing financial literacy in India since it enhances Saharsa district's socioeconomic inclusion. |
| Keywords: | Financial Psychology, Economics and Development, Banking, Financial Literacy |
| JEL: | D12 D14 D63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:308691 |
| By: | Eduardo de Sá Fortes Leitão Rodrigues |
| Abstract: | Savings play a critical role in both individual financial well-being and economic development. This article examines the impact of financial literacy, income, educational level, and age on saving decisions across 136 countries, using data from the Global Financial Inclusion Database (2021). Financial literacy is conceptualized as a latent variable, constructed from five indicators related to financial knowledge, financial behaviour, and financial attitudes, aligned with the Organisation for Economic Co-operation and Development (OECD) pillars. Employing Generalised Structural Equation Modelling (GSEM), the analysis demonstrates that financial literacy is a fundamental driver for the decision to save in the short and long term. Education level and income are consistent predictors of savings, while age exhibits distinct effects depending on the savings objective. Regional differences emerge, with Latin American countries showing the strongest link between financial literacy and savings, whereas in high-income economies, its influence is less pronounced. These findings underscore the multifaceted role of financial literacy in shaping saving decisions and highlight its implications for tailored public policies promoting financial literacy. |
| Keywords: | financial literacy; savings; GSEM approach. |
| JEL: | D14 G53 I22 C38 O16 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03622025 |
| By: | Aomar Ibourk; Zakaria Elouaourti |
| Abstract: | This paper was originally published on erf.org.eg The digital divide in the financial sector has occurred through the development of financial technologies. These latest “FinTech” refers to technological innovations that have emerged in the financial system in recent years, which are the new channels for providing financial services. These innovations have disrupted traditional financing models by making financial transactions more secure and by reducing spatiotemporal constraints. The purpose of this paper is to investigate 1) the digital financial inclusion levels across the MENA countries? 2) which segments of the population are digitally financially excluded? 3) How the digital divide could preclude some segments from being financially included as a result of a lack of financial literacy (risks)? 4) and how FinTech could promote financial inclusion of segments excluded by the conventional financial system (women, elderly) and therefore the inclusive development of the MENA region (opportunities). To tackle these issues, we employed a mixed methodological approach (quantitative and qualitative) and by mobilizing micro-level data on 9, 053 individuals extracted from the World Bank's latest Global Findex 2021 database. First, our comparative analysis mobilizing the principal component analysis method to develop a Digital Financial Inclusion Index (DFII) highlighted that despite the various initiatives that have been undertaken in recent years, digital financial inclusion in the MENA region remains at a low level compared to other countries worldwide. Second, the results of the estimations on a Logit model pointed out that the educational level, labor force participation, information and communication technologies, and internet access are the main drivers of digital financial inclusion in the MENA region. Our work is original in that it provides grounded empirical evidence on the digital financial inclusion levels across MENA countries and investigates how to ensure that the digital divide in the financial sector "Financial Technologies" does not further exclude segments of the population (women, elderly...) financially excluded by the conventional financial system by increasing their digital financial literacy, promoting their participation in the labor market, and expanding access to mobile phones and the Internet. Considering the comprehensiveness of our sample, policy implications will be of great interest to financial sector regulators in MENA region to improve digital financial inclusion in the region, as these implications have been drawn from the micro-level experiences of individuals constituting our database. |
| Date: | 2023–07 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:rpnn_74 |
| By: | Eduardo Nakasone; Máximo Torero; Angelino Viceisza |
| Abstract: | Migrant remittances are significant but remain relatively costly to send. Policymakers have argued that fintech, specifically, comparison websites like kayak.com but for sending money, can boost financial inclusion and reduce remittance prices. Yet, little is known about how migrants with limited education and trust in digital methods interact with fintech. We conduct a field experiment on a comparison website and vary remittance-company attributes shown to migrants, specifically, the time for delivery and customer reviews. We use visual attention data to explore search. We find that (1) while 10-28 percent of migrants exhibit some type of remittance habit, more than half experiment with companies once provided with fintech information; (2) while migrant response to information is rational and search seems targeted, there is considerable heterogeneity—those with low prior awareness of comparison sites, financial literacy, or information-processing capability are less responsive to fintech; and (3) when presented with fintech information, migrants are 44 percent more likely to behave counter to the preferences over attributes they exhibit outside of the study. As such, they pay 20-30 percent more despite typically shopping around for the cheapest company. The findings suggest a nuanced potential for fintech to improve financial inclusion and consumer welfare. |
| JEL: | C93 D87 F22 F24 G2 G53 O12 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33183 |
| By: | Divya Sharma |
| Abstract: | The paper presents findings from a comprehensive study examining the saving and credit behaviors of low-income households residing in unauthorized colonies within a metropolitan area. Utilizing a dual approach, the study engaged in prolonged fieldwork, including repeated fortnightly interviews with selected households and a one-time primary survey with a larger sample size. The research meticulously analyzed the financial lives of these households, focusing on their saving and credit behaviors and assessing the accessibility and intensity of usage of financial instruments available to them. Through suitable regression models, the study identified key factors influencing the usage of financial instruments among low-income households. Transaction costs, convenience, and financial knowledge emerged as significant determinants impacting both usage decisions and the intensity of usage. The research underscores the importance of addressing demand side factors to ensure widespread financial services usage among low-income groups. Efforts to reduce time costs, enhance product accessibility and liquidity, and augment financial literacy are essential for fostering financial inclusion in unauthorized colonies. The findings highlight the imperative of moving beyond mere financial access towards promoting universal usage to realize the full benefits of financial inclusion. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.03033 |
| By: | Elie BOLA BOONGO (UNIKIS - Université de Kisangani); Dieu-Merci IMO LOKWA; Joël BOSSONGA ILEMA; Samuel BOLA MBOYO |
| Abstract: | This study focuses on the adoption and impact of mobile money on household well-being in Mbandaka, located in the Equateur province of the Democratic Republic of Congo. The objective is to understand how this technology influences financial inclusion, mobility, and the ease of transactions between individuals from different entities, thereby affecting the overall well-being of households.The study has a dual aim. First, it seeks to identify the profile of individuals who adopt mobile money in Mbandaka. Second, it assesses the impact of mobile money usage on the socioeconomic well-being of users. The first objective aims to provide a description of the socioeconomic profile of mobile money users, considering various criteria such as age, gender, education level, and employment. The second objective is to determine whether the use of this technological innovation has indeed improved the quality of life and well-being of the households that utilize it.The study specifically targets mobile phone users with a mobile money account. A sample of 100 individuals was drawn for the survey. Data were collected on their socioeconomic characteristics before and after adopting mobile money technology. The descriptive approach adopted allows for detailing the characteristics of individuals who chose to use this service.Survey results reveal that all mobile money users interviewed (100%) prefer using this service over banks or money transfer agencies for their financial transactions. This preference is attributed to the advantages offered by mobile money, including simplicity, accessibility, and efficiency. The study also shows that 100% of respondents, who were previously excluded from the traditional banking system, were able to access financial services through mobile money usage.These findings confirm the initial hypothesis that the adoption of mobile money has a positive impact on the well-being of households in Mbandaka. By providing financial inclusion opportunities to unbanked individuals, mobile money enables them to benefit from financial services they would not have otherwise obtained. Consequently, the use of this technology appears to enhance living conditions and facilitate financial transactions for households in the city of Mbandaka. |
| Abstract: | La présente étude se concentre sur l'adoption et l'impact de l'utilisation du mobile money sur le bien-être des ménages dans la ville de Mbandaka, située dans la province de l'Équateur en République Démocratique du Congo. L'objectif est de comprendre comment cette technologie influence l'inclusion financière, la mobilité et la facilité des transactions entre particuliers de différentes entités, et donc, le bien-être général des ménages.L'étude poursuit un double objectif. Premièrement, elle cherche à identifier le profil des individus qui adoptent le mobile money à Mbandaka. Deuxièmement, elle évalue l'impact de l'utilisation du mobile money sur le bien-être socioéconomique des utilisateurs. Le premier objectif vise à fournir une description du profil socioéconomique des utilisateurs de mobile money, en tenant compte de divers critères tels que l'âge, le sexe, le niveau d'éducation et l'emploi. Quant au second objectif, il consiste à déterminer si l'utilisation de cette innovation technologique a effectivement amélioré la qualité de vie et le bien-être des ménages qui l'utilisent.L'étude cible spécifiquement les utilisateurs de la téléphonie mobile ayant un compte mobile money. Un échantillon de 100 individus a été tiré pour l'enquête. Des données ont été recueillies sur leurs caractéristiques socioéconomiques avant et après l'adoption de la technologie mobile money. L'approche descriptive adoptée permet de détailler les traits caractéristiques des individus qui ont choisi d'utiliser ce service. Les résultats de l'enquête révèlent que la totalité des utilisateurs de mobile money interrogés (100%) préfèrent utiliser ce service plutôt que les banques ou les agences de transfert d'argent pour leurs transactions financières. Cela s'explique par les avantages offerts par la monnaie mobile, notamment sa simplicité, son accessibilité et son efficacité. L'étude montre également que 100% des personnes enquêtées, qui étaient auparavant exclues du système bancaire traditionnel, ont pu accéder aux services financiers grâce à l'utilisation de mobile money. Ces résultats confirment l'hypothèse de départ selon laquelle l'adoption du mobile money a un impact positif sur le bien-être des ménages de Mbandaka. En offrant des opportunités d'inclusion financière aux personnes non bancarisées, le mobile money permet à ces individus de bénéficier de services financiers qu'ils n'auraient pas pu obtenir autrement. |
| Keywords: | Mobile money, financial inclusion, Soci-economic aspects, Inclusion financière et Lutte contre la Pauvreté, Bien-être, Socio-économie, well-being, household |
| Date: | 2023–10–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04792972 |
| By: | Haag, Lucy; Oberrauch, Luis; Brahm, Taiga; Biewen, Martin |
| Abstract: | Economic literacy has far-reaching consequences on savings and investments and ultimately affects individual financial well-being. Several studies report a gender difference in economic literacy in favor of males, disadvantaging women and posing a threat to gender equality. However, there is limited evidence addressing the factors underlying the gender gap. Using a representative sample of German high school students (N=1, 958), we investigate gender differences in students’ economic literacy. Additionally, we examine potential explanatory factors for the gap that have been reported in previous studies focusing more narrowly on financial literacy and personal finance. Results confirm a substantial gender gap in economic literacy favoring boys (0.25 SD). Regression models and Oaxaca-Blinder decomposition analyses reveal math ability and interest in economics as important drivers for the gender gap. Self-efficacy and risk aversion are further factors accounting for the gap while most socialization variables appear to have little relevance. Including effort as a control variable increases the gap, suggesting that the gap may have been underestimated in previous studies that did not consider this factor. Our study provides important implications for policy interventions to mitigate the gender gap in economic literacy. |
| Keywords: | Economic Literacy, Gender Gap |
| JEL: | A21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:308430 |
| By: | Pitters, Julia; Weber, Susanne Theresia |
| Abstract: | The IU Compass Project titled "Geldanlagemotive von Student*innen der IU Internationale Hochschule in Zeiten der Krise" investigates the driving forces behind the financial decision-making and personal investment behaviors of students at IU Internationale Hochschule. This research addresses both tangible and intangible factors influencing the decision to invest in personal development, such as the pursuit of higher education. Students' investment preferences are shaped by a combination of personal attributes and current developments in the financial markets and geopolitics. A central aspect of this study is the examination of the financial literacy of aspiring academics. Key questions addressed include students' risk assessments of various investment forms, the perceived threat of crises like the Ukraine war and inflation, and the role of demographic factors in financial decisions. The results indicate significant gender differences in risk attitudes and a strong need for improved financial competence. The study aims to provide fundamental insights into the relevance of financial education for IU students and advocates for curricular enhancements to support informed financial decision-making processes. |
| Keywords: | Generation Z, Financial behavior, Wealth accumulation, Investment, Students, Financial education |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iubhbm:308798 |
| By: | Dean Karlan; Monica P. Lambon-Quayefio; Utsav Manjeer; Christopher R. Udry |
| Abstract: | Digital finance in agriculture is a nascent technology which could help improve rural financial inclusion. In an experimental evaluation of a digital lending product for farmers in Southern Ghana, credit increases farm investments but has few statistically significant average effects on downstream outcomes. However, logistical challenges generated imperfect compliance with the treatment assignment, with some loans delivered in a timely fashion for agricultural investments and others coming later. We cautiously exploit this unplanned non-experimental implementation heterogeneity and conclude that agriculturally-focused digital credit platforms have potential to tackle persistent rural financial market imperfections, but the timing seems critical and deserves further study. |
| JEL: | Q14 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33271 |
| By: | Lovisa Reiche |
| Abstract: | The gender gap in inflation expectations, women reporting systematically higher expectations in consumer surveys, has been attributed to traditional gender norms, and thus women’s greater exposure to volatile food prices. This overlooks a crucial factor: financial answer confidence. Using data from German households, I show that the “grocery shopping” effect occurs only among those with low answer confidence, while there is no gap among those with high answer confidence. The interaction of financial answer confidence and the shopping experience can be explained through the lens of a simple Bayesian learning framework, where noisy signals only increase mean expectations when priors are imprecise. |
| Keywords: | consumer inflation expectations, gender, financial literacy |
| JEL: | E31 E71 G53 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11588 |
| By: | Motohiro Yogo; Andrew Whitten; Natalie Cox |
| Abstract: | We study retirement and bank account participation for the universe of U.S. households with a member aged 50 to 59 in the administrative tax data. ZCTA-level average income, income inequality, and racial composition predict retirement account participation for low-income households, conditional on household income and regional price parities. Income inequality also predicts bank account participation for low-income households. We estimate the causal effect of access to an employer retirement plan on participation. Recent policy proposals for universal access with automatic enrollment could increase participation by 19 percentage points in the lowest income quintile over ten years. |
| JEL: | D14 G51 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33256 |
| By: | Tian , Shu (Asian Development Bank); Wu , Yu (Nanjing Agricultural University); Zhou, Wenwen (Southwestern University of Finance and Economics) |
| Abstract: | By capturing the adoption of digital services and applications as well as digital industry development, this paper constructs a comprehensive index to measure digitalization at the city level in the People’s Republic of China (PRC) and investigates the impact of digitalization on income inequality using household-level data in the PRC. The findings reveal that a one-unit advancement in the digitalization index significantly reduces the income gap by 1.83% for an average household. This mitigating effect remains statistically and economically significant after addressing endogeneity and robustness concerns. The impact is more pronounced in less-developed areas and among households with lower education levels. Further analysis shows that digitalization narrows the income gap by increasing earnings more for lower-income households, primarily through enhanced employment and investment opportunities. Additionally, digitalization boosts business income for entrepreneurial households. These findings provide valuable policy insights, suggesting that developing economies can reduce income inequality by promoting digitalization, supporting digital-related job creation, and enhancing financial literacy. |
| Keywords: | digitalization; inclusiveness; income inequality |
| JEL: | D30 O10 O30 |
| Date: | 2025–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:0764 |
| By: | Charles Dupont; Debraj Roy |
| Abstract: | Eradicating extreme poverty and inequality are the key leverage points to achieve the seventeen Sustainable Development goals. Yet, the reduction in extreme poverty and inequality are vulnerable to shocks such as the pandemic and climate change. We find that that these vulnerabilities emerge from the interaction between individual and institutional mechanisms. Individual characteristics like risk aversion, attention, and saving propensity can lead to sub-optimal diversification and low capital accumulation. These individual drivers are reinforced by institutional mechanisms such as lack of financial inclusion, access to technology, and economic segregation, leading to persistent inequality and poverty traps. Our experiments demonstrate that addressing above factors yields 'double dividend' - reducing poverty and inequality within-and-between communities and create positive feedback that can withstand shocks. |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2412.17822 |
| By: | Fabien Clive Ntonga Efoua (FSEG, UYII-Soa - Faculty of Economics and Management, University of Yaounde II - Soa, CEDIMES - CEDIMES - Centre d'Etudes sur le Développement International et les Mouvements Economiques et Sociaux, CEREG - University of Yaoundé II-SOA, Centre d'Etudes et de Recherche en Economie et Gestion); Françoise Okah Efogo (Faculty of Economics and Management, University of Ebolowa); Yanick Fredy Mvodo (UDa - Faculty of Economics and Applied Management, University of Douala) |
| Abstract: | This paper proposes a reflection on the opportunities and the challenges of the use of digital means of payment (decentralised and regulated ones) in the African economies. In this perspective, we structure our reasoning around three axes. First, we try to show that digital currencies can serve as a lever for financial inclusion and the revolution of means of payment in an increasing digitalization context. Second, we discuss the technical and the infrastructural constraints (deployment of the blockchain, electricity and Internet access) which condition the effective use of digital currencies. Third, we discuss the trade-offs and the possible implications that arise from the circulation of the Bitcoin, the Altcoins and the Stablecoins on the one hand, and the Govcoins on the other. In our view, the African authorities should first focus on overcoming infrastructural and institutional obstacles, rather than rushing the adoption of cryptocurrencies. Some policies implemented in this direction would in fact offer the continent the opportunity to anchor itself once and for all to progress. |
| Keywords: | Cryptocurrencies, Govcoins, Central Bank Crypto Currencies, African economies |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04784299 |