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on Financial Literacy and Education |
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Issue of 2026–06–29
seven papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Ozili, Peterson K |
| Abstract: | This article presents some of the current thinking and arguments about financial inclusion from the perspective of informed financial inclusion experts. It gives the reader an opportunity to reflect on the objective, benefits, risks and challenges of financial inclusion and to make an independent assessment of what the financial inclusion agenda is all about. The viewpoints, presented as quotes in this article, show that financial inclusion is a promising development policy agenda and there are good intentions for promoting financial inclusion. However, achieving financial inclusion is a complex process, with too many interested parties seeking to serve customers in exchange for gain while banked adults are left to deal with the residual risks associated with using traditional and/or digital financial services. |
| Keywords: | financial inclusion, digital financial inclusion, fintech, digital technologies, quotes |
| JEL: | G20 G21 G23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129328 |
| By: | Tim Kaiser; Annamaria Lusardi; Olivia S. Mitchell; Luis Oberrauch |
| Abstract: | This paper investigates why the widely-used Big Three financial literacy index provides a reliable measure of financial literacy. Using an Item Response Theory framework, we estimate item difficulty and discrimination parameters and conduct a meta analysis to assess the stability of these properties across datasets and countries. Results confirm the scale's validity and reliability, with item characteristics that remain stable across populations and settings. We find no evidence of measurement differences across demographic subgroups or countries. Compared to the longer Big Five scale, the Big Three index performs similarly in measuring financial literacy and predicting financial behaviors. |
| JEL: | A20 D14 G53 I20 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35342 |
| By: | Motta, Victor |
| Abstract: | This study examines the relationship between the Financial Health Index of Brazilians (Índice de Saúde Financeira do Brasileiro, I-SFB) and credit behavior, focusing on two central questions: (1) how different levels of financial health relate to the likelihood of delinquency, and (2) how transitions between stages of late payments and delinquency vary according to the financial health levels measured by the I-SFB. The results reveal a significant association between higher I-SFB scores and a lower likelihood of delinquency, with the financial behavior and financial security dimensions showing the strongest link to reduced risk. The study also highlights potential improvements to the financial skills dimension, which showed no significant relationship with delinquency. A revision of the items comprising this dimension is put forth, incorporating more practical aspects of financial knowledge application. For the private sector, the study proposes using the I-SFB as a diagnostic tool to develop new financial products that are better aligned with the population’s needs, thereby fostering more robust financial health. The implementation of integrated strategies, combining behavioral interventions, practical financial education, and consumer protection policies, is essential to achieve more sustainable outcomes. |
| Keywords: | financial health, default rate, public policy, financial inclusion |
| JEL: | D14 G21 I19 |
| Date: | 2025–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128990 |
| By: | Jeffrey R. Brown |
| Abstract: | Deciding whether to use an annuity to draw down accumulated retirement wealth is among the most complex financial decisions individuals face. It requires reasoning about longevity risk, stochastic income streams, and largely irreversible tradeoffs, often at older ages and with limited opportunities to learn from experience. This paper reviews theoretical, empirical, and experimental research to examine how financial literacy and longevity literacy shape annuitization decisions. While some extensions of the standard lifecycle model can rationalize low annuity demand, their explanatory power depends on individuals’ ability to optimize over a set of complex risks and tradeoffs. Evidence shows that, although financial and longevity literacy are only weakly and inconsistently related to annuity take-up, they are strongly associated with retirement planning, the coherence of annuity valuations, and sensitivity to framing and choice architecture. These patterns suggest that literacy should be understood not as a direct determinant of annuity demand, but as a constraint on the extent to which observed annuitization behavior can be interpreted as revealing true preferences. |
| JEL: | D14 G41 G52 H0 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35323 |
| By: | Etienne Fakaba Sissoko; Khalid Dembélé (Université des sciences sociales et de gestion de Bamako - USSGB - Université des sciences sociales et de gestion de Bamako) |
| Abstract: | Digital monetary infrastructures are transforming the institutional architecture of money. In the West African Economic and Monetary Union (WAEMU), the Central Bank of West African States (BCEAO) has moved toward interoperable instant payments through the PI-SPI platform, while policy discussions on central bank digital currencies have opened the question of a possible regional retail instrument, here designated as the e-CFA. This article examines whether these instruments should be read as neutral technical innovations, as mechanisms of financial inclusion, or as institutional devices that redistribute monetary power. The analysis combines monetary institutionalism, banking intermediation theory and critical approaches to algorithmic regulation. It uses a qualitative documentary method and a comparative reading of three CBDC experiences: China's e-CNY, Nigeria's eNaira and the Bahamian Sand Dollar. The article argues that the core issue is not digitization itself, but the governance of programmability, transaction metadata, technical infrastructure and the future role of banks. PI-SPI can reduce fragmentation and transaction delays, but it also creates a common operational locus for payment flows. A direct retail e-CFA, if designed without tiering, holding limits, legal safeguards and bank participation, could intensify deposit migration and weaken the financing capacity of commercial banks. Conversely, a regulated two-tier design could requalify banks as trusted interfaces, credit providers and value-added service institutions. The article contributes the concept of distributed monetary sovereignty: a model in which public monetary authority is preserved while algorithmic rules, data governance and operational infrastructures remain legally bounded, auditable and institutionally plural. |
| Keywords: | financial inclusion JEL codes: E42, O55, O33, G21, E51, algorithmic governance, banking disintermediation, monetary sovereignty, WAEMU, BCEAO, e-CFA, PI-SPI, central bank digital currency, central bank digital currency PI-SPI e-CFA BCEAO WAEMU monetary sovereignty banking disintermediation algorithmic governance financial inclusion JEL codes: E42 E51 G21 O33 O55 |
| Date: | 2026–02–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05607364 |
| By: | Ludolph, Melina; Nghiem, Giang; Tonzer, Lena |
| Abstract: | We examine whether combining factual information on inflation levels and forecasts with a narrative can persistently shape consumers' inflation expectations. In a preregistered randomized controlled trial with a representative sample of 3, 000 German consumers, participants received either numerical or textual information about inflation rates, with or without an accompanying narrative. All treatments immediately lower inflation expectations, with numerical information eliciting stronger adjustments. Adding a narrative produces no additional immediate effect, confirming that it conveys no new information. However, only the combination of numerical information with a narrative yields a lasting reduction in inflation expectations and forecast uncertainty still observable after four weeks. Our results suggest that combining precise information with a narrative enhances information retention and can lead to more persistent shifts in consumers' beliefs. The effects are strongest when respondents perceive the narrative as relatable and emotionally engaging, and among those with low financial literacy and limited knowledge of inflation. |
| Keywords: | central bank communication, inflation expectations, narratives |
| JEL: | D84 D91 E31 E58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:341628 |
| By: | Binierose Cacho (University of Hawaii); Katerina Sherstyuk (University of Hawaii) |
| Abstract: | Measuring individual behavioral traits may help explain observed deviations from predicted behavior and differences among participant actions in many experimental market and auction settings. We discuss existing measures of risk and time preferences, cognitive abilities, financial literacy, regret and other emotions, overconfidence, and competitiveness. We focus on short tasks and survey items that may be used as simple add-ons to main laboratory market tasks. We further touch upon methodological issues such as monetary incentives, presentation options, repeat measurements and task timing. Finally, we catalog existing laboratory market experiments that employ behavioral measures. |
| Keywords: | auction theory, time costs, laboratory experiments |
| JEL: | C83 C91 D40 D91 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hai:wpaper:202603 |