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on Financial Literacy and Education |
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Issue of 2026–02–02
five papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Khalid, Usman; Ali, Amjad; Audi, Marc |
| Abstract: | This paper examines the impact of mobile payments, financial literacy, and access to formal financial systems on borrowing practices among individuals residing in the European Union. It utilises data from the 2023 Flash Eurobarometer 525 and predicts the probability of consumer loan ownership through a logistic regression model. The analysis shows that borrowers generally possess higher financial literacy, suggesting an empowered approach to managing debt. Surprisingly, users of digital financial services tend to borrow less, potentially indicating that they prefer alternative tools or manage their finances more prudently. Moreover, possessing financial products such as savings accounts, mortgages, and insurance increases the likelihood of borrowing, whereas access to long-term investment products like pensions is linked with lower borrowing levels. These results suggest that borrowing decisions are partially influenced by access to financial instruments, individual financial knowledge, attitudes towards digital finance, and targeted policies emphasising education alongside comprehensive financial strategies. |
| Keywords: | Consumer Financial Behaviour, Financial Literacy, Borrowing Patterns, Digital Finance, European Union |
| JEL: | G2 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127308 |
| By: | António Afonso; Eduardo 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) and employing Generalized Structural Equation Modelling (GSEM). Financial literacy is conceptualized as a latent variable, based on five indicators related to financial knowledge, financial behavior, and financial attitudes, aligned with the Organization for Economic Co-operation and Development (OECD) pillars. The analysis demonstrates that financial literacy is a fundamental driver for saving 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. |
| Keywords: | financial literacy; savings; Generalized Structural Equation Modelling; behavioral economics; global survey. |
| JEL: | D14 G53 I22 C38 O16 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04032026 |
| By: | Mr. Adolfo Barajas; Kensuke Sakamoto; Rasool Zandvakil |
| Abstract: | Economic benefits of financial inclusion, meaning a broadening access of the population to financial services, have been studied extensively, but less is known about its potential effects on financial stability. We explore the complementarity between credit booms and episodes of rapid expansion of the borrower base, or “credit inclusion, ” and find that the confluence of both helps to predict future financial distress. Rapid credit inclusion on its own does not usually portend future instability, but it is much more likely to do so when combined with a credit boom. These results can help to enhance the policymaker’s early warning toolbox. |
| Keywords: | Financial inclusion; Credit booms; Financial stability; Early warning indicators |
| Date: | 2026–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/008 |
| By: | Sokolovska, Olena |
| Abstract: | This study provides an overview of main academic research on insurance literacy. We identify main challenges of quantitative measurement of financial or insurance literacy of the population. We made an attempt was made to identify the set of factors that determine the level of insurance coverage (with accident and health insurance as an example), which can be used to predict the level of insurance literacy. |
| Keywords: | financial literacy, insurance literacy, accident and health insurance |
| JEL: | G20 G22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127219 |
| By: | Chuhong Wang (Fujian Normal University); Xingfei Liu (University of Alberta); Liang Wang (Concordia University); Jiatong Zhong (University of Alberta) |
| Abstract: | We investigate the role of child gender in financial responses to shocks among households in China, where having a son has deep historical cultural roots, especially in rural areas. Specifically, we compare investment and savings decisions between families with daughters and those with sons in both rural and urban settings by leveraging two quasi-natural experiments: land expropriation and housing demolition in China. Land expropriation primarily affects rural households, while housing demolition predominantly impacts urban households, offering a comparative lens to understand how households adjust financial portfolios under different contexts. We find that expropriation with hukou changes increases stock investments and reduces savings rates for rural households with a daughter relative to those with a son. In urban areas, households with a daughter are also more likely to invest in the stock market following housing demolition, but their savings rates remain unchanged. Our findings reveal the differential impact of child gender on household financial decisions following background risk shocks (expropriation) and wealth shocks net of background risk changes (demolition). |
| Keywords: | child gender; household financial decision; background risk; land expropriation; housing demolition |
| JEL: | D14 G11 H13 J16 |
| Date: | 2026–01–20 |
| URL: | https://d.repec.org/n?u=RePEc:ris:albaec:022119 |