nep-fle 2026-05-11 papers

on Financial Literacy and Education

Issue of 2026–05–11
five papers chosen by
Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca

Financial Inclusion for Inclusive Growth By BEN CHEIKH, Nidhaleddine; Rault, Christophe
Gender, Financial Literacy and Active Stock Market Participation By M. Tedde
Stockholding in Europe: Evidence from the Consumer Expectations Survey By Dimitris Christelis; Dimitris Georgarakos; Tullio Jappelli; Geoff Kenny; Justus Meyer
The double-edged mind: How LLMs expand stock market participation yet strengthen confirmation-seeking By Damm, Cara; Bauer, Kevin; Hett, Florian; Pelizzon, Loriana
This paper discusses communication with the general public about financial stability. The paper first draws parallels with the literature on monetary policy communication. Next, it outlines additional challenges facing communication on financial stability. In particular, a broad concept such as financial stability may be difficult to make concrete. In contrast, illustrating financial instability is straightforward. Building on that notion, the paper closes with three focal points for policy communication. First, that financial instability is the exception. Second, that such instability is, however, a very costly exception. Third, that it is, therefore, important to remain vigilant and build financial resilienceâ€“even at times when volatility is low. Focusing on these three focal points can help central banks build public awareness of the relevance of financial stability. These points can also be a basis for further empirical research on financial stability communication. By David-Jan Jansen

Financial Inclusion for Inclusive Growth

By:	BEN CHEIKH, Nidhaleddine (ESSCA School of Management); Rault, Christophe (University of Orléans)
Abstract:	Using a sample of 67 countries, this paper examines how financial inclusion shapes the transition to inclusive and sustainable growth. First, we analyze the heterogeneous and asymmetric effects of key determinants using panel quantile regression. The results show that financial inclusion, institutional quality, and ICT diffusion significantly affect inclusiveness only in the lower tail of the distribution. While financial inclusion and ICT diffusion appear detrimental, institutional quality promotes shared prosperity. Second, we explore a mediating effect using a non-linear panel threshold model. The findings highlight the role of financial inclusion in enhancing inclusive growth. Although ICT infrastructure negatively affects inclusiveness at low levels of financial inclusion, this relationship becomes positive beyond a certain threshold. These results suggest that policymakers should combine financial inclusion, governance quality, and ICT development to foster inclusive growth.
Keywords:	inclusive growth, financial inclusion, non-linear panel data modelling
JEL:	C23 O11 O16 O43
Date:	2026–04
URL:	https://d.repec.org/n?u=RePEc:iza:izadps:dp18582

Gender, Financial Literacy and Active Stock Market Participation

By:	M. Tedde
Abstract:	Women are less financially literate than men and participate less to stock market. However, using a unique brokerage dataset and controlling for different levels of financial literacy, we find that women achieve lower scores in the MiFID questionnaire not because of lack of knowledge but because of lack of confidence in their knowledge. Nonetheless, female participation in stock market is still lower than male investors.
Keywords:	financial literacy;Confidence;MiFID Directive;gender gap;Stock market participation
Date:	2026
URL:	https://d.repec.org/n?u=RePEc:cns:cnscwp:202603

Stockholding in Europe: Evidence from the Consumer Expectations Survey

By:	Dimitris Christelis (University of Glasgow, CSEF, and CFS); Dimitris Georgarakos (European Central Bank, University of Glasgow and CEPR); Tullio Jappelli (University of Naples Federico II, CSEF, and CEPR); Geoff Kenny (European Central Bank); Justus Meyer (European Central Bank, University of Glasgow)
Abstract:	We examine recent changes in stock market participation using newly available survey data from eleven euro area countries over the period 2020–2024. The evidence points to substantial turnover, with around10% of non-stockholders entering the market each year, and more than 20% of stockholders exiting. New entrants tend to have lower education, income, financial literacy, and risk tolerance than established investors, indicating a shift in the composition of market participants. We also highlight the growing importance of cryptocurrency investments among retail investors. Overall, these findings shed new light on evolving household financial behavior and its implications for market participation and financial stability.
Keywords:	Stocks, Mutual Funds, Crypto Assets, Household Finance, Consumer Expectations Survey
JEL:	D14 E21 G51
Date:	2026–04–28
URL:	https://d.repec.org/n?u=RePEc:sef:csefwp:780

The double-edged mind: How LLMs expand stock market participation yet strengthen confirmation-seeking

By:	Damm, Cara; Bauer, Kevin; Hett, Florian; Pelizzon, Loriana
Abstract:	The shift from information retrieval (keyword-based search engines) to information synthesis (generative AI) constitutes a fundamental change in how people inform themselves online. We investigate how this shift impacts investment behavior using an incentivized online experiment (N = 374), in which we vary whether participants have access to keyword-based search engines, an LLM-based chatbot, or no additional information source. We find that LLMs facilitate participation in the stock market. Participants with access to an LLM when making investment decisions are significantly more likely to enter the stock market and to remain invested compared to those with access to keyword-based search engines or no further information. Our experiment suggests that perceived difficulty of stock market participation decreases and confidence in these choices increases when using an LLM. However, we also document a substantial risk. Access to LLMs enables individuals to confirm and strengthen experimentally induced beliefs. Even when the chatbot itself is not biased, users can prompt the model to validate beliefs they want to hold. Overall, our findings suggest that while LLMs can reduce participation frictions and encourage stock market investments, their effectiveness in confirmation-seeking can also have detrimental consequences. Consequently, these results highlight the critical need for consumer protection frameworks and financial literacy programs that specifically address the unique dynamics of human-AI interaction in modern retail investing.
Keywords:	Large Language Models, Belief Formation, Motivated Reasoning, Financial Decision Making, Robo-Advisors, Stock Market Participation
Date:	2026
URL:	https://d.repec.org/n?u=RePEc:zbw:safewp:340833

This paper discusses communication with the general public about financial stability. The paper first draws parallels with the literature on monetary policy communication. Next, it outlines additional challenges facing communication on financial stability. In particular, a broad concept such as financial stability may be difficult to make concrete. In contrast, illustrating financial instability is straightforward. Building on that notion, the paper closes with three focal points for policy communication. First, that financial instability is the exception. Second, that such instability is, however, a very costly exception. Third, that it is, therefore, important to remain vigilant and build financial resilienceâ€“even at times when volatility is low. Focusing on these three focal points can help central banks build public awareness of the relevance of financial stability. These points can also be a basis for further empirical research on financial stability communication.

By:	David-Jan Jansen (Vrije Universiteit Amsterdam)
Keywords:	financial stability, financial literacy, education, central bank communication
JEL:	A20 G01
Date:	2025–12–11
URL:	https://d.repec.org/n?u=RePEc:tin:wpaper:20250070

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