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on Financial Literacy and Education |
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Issue of 2025–05–12
three papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Weiss-Cohen, Leonardo; Newall, Philip (University of Warwick); Ranyard, Rob; Ayton, Peter; Clacher, Iain |
| Abstract: | Measures of financial literacy are widely used in academic research and also underpin a wide range of governmental policy interventions around the world. Fernandes, Lynch, and Netemeyer created a valid and reliable financial literacy questionnaire in “Financial literacy, financial education, and downstream financial behaviors” which has been widely used and frequently cited. However, we find that ongoing changes to legislation regarding the age at which individuals must start withdrawing from their retirement plans in the US (401k and IRA) have invalidated one of its questions as originally proposed (Question 8). This undermines the validity of the measure and will lead to incorrect usage and misleading inferences if the questionnaire is not updated. We recommend that future researchers exclude this question. We conducted Item Response Theory and comparative analyses across five different datasets covering multiple time points and N=4, 959 participants to confirm that the scale remains reliable and measures the same construct without this item. The invalidated question is also specific to the US, and its removal increases the international scope of the measure. We discuss the remaining limitations of this, and similar, financial literacy questionnaires. Despite its limitations, the shorter version of the questionnaire remains a valid scale for measuring financial literacy with an emphasis in investing behavior, with international applicability. Researchers and policy-makers should be aware of the issues raised here when measuring financial literacy or making comparisons across time and across different jurisdictions. |
| Date: | 2025–03–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:493x7_v3 |
| By: | Gillian Brunet; Eric Hilt; Matthew S. Jaremski |
| Abstract: | The Liberty Bond drives of World War I were nation-wide interventions aimed at increasing financial literacy and associating bond ownership with patriotism. Using data from the first year of the Survey of Consumer Finances, 1947, through 1971, we investigate whether exposure to the drives shaped investing behavior over the long run. We find that households residing in counties that had high Liberty Bond participation had greater stock and bond ownership rates in later decades, and held more favorable opinions towards retirement saving and stock investment. These effects are present only among cohorts actually exposed to the bond drives, and not among younger cohorts in the same counties, and are robust to an instrumental variables specification that takes advantage of differences in the way the bond drives were conducted. Our estimates imply that household stock ownership rates would have been about 20% lower in the late 1960s if the bond drives had not been conducted. |
| JEL: | G11 H31 N22 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33541 |
| By: | Fort, Margherita (University of Bologna); Loviglio, Annalisa (University of Bologna); Tinti, Susanna (University of Bologna) |
| Abstract: | We study the impact of a program designed to enhance data literacy on graduate students’ skills and academic outcomes in a large Italian university. The program (i.e. a minor) targets students who are expected to have weak quantitative competences and offers 120-hours training focused on improving the ability to interpret and process data, in addition to the regular courses of the master program in which students are enrolled (i.e. their major). The admission process to the minor is characterized by rationing, resolved by random assignment of available slots to applicants. Exploiting the resulting exogenous variation for identification, we find that the program largely improved digital literacy of participants with low pre-treatment levels of numeracy. Despite the additional effort required by the program, we can rule out any slowdown in the progress of the academic career in the major master program of participating students. |
| Keywords: | tertiary education, minor, data literacy, human capital formation |
| JEL: | I20 J24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17803 |