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on Financial Literacy and Education |
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Issue of 2025–12–01
six papers chosen by Viviana Di Giovinazzo, Università degli Studi di Milano-Bicocca |
| By: | Ngunza Maniata, Kevin |
| Abstract: | Financial inclusion has become a cornerstone of development policy, yet progress across low-income and fragile states remains uneven. This paper examines the evolution of financial inclusion in the Democratic Republic of the Congo (DRC) using recent data from the World Bank’s Global Findex 2025 and the GSMA’s 2025 Mobile Money Report. Despite global account ownership reaching 79 percent of adults, fewer than 40 percent of Congolese adults hold a formal financial account. The study situates the DRC within an institutional economics framework and highlights structural constraints including informality, weak trust in financial institutions, limited infrastructure, and low financial literacy. The analysis finds that while mobile money is expanding access, its impact depends on improvements in digital infrastructure, governance, and consumer protection. The paper concludes that inclusive finance in the DRC requires not only technological diffusion but also the rebuilding of institutional credibility and human capital. |
| Keywords: | Financial inclusion; Digital finance; Mobile money; Democratic Republic of the Congo; Institutional trust; Inclusive growth |
| JEL: | G21 O16 O55 |
| Date: | 2025–11–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126774 |
| By: | Ping Cheng; Mingzhi Hu; Zhenguo Lin; Yingchun Liu |
| Abstract: | This paper investigates racial disparities in mortgage stress. We begin by developing a simple model, and using data from the Panel Study of Income Dynamics (PSID), we find that black borrowers are significantly more susceptible to mortgage stress than their white counterparts, even after controlling for observable factors Our analysis reveals that a substantial portion of this racial gap can be attributed to differences in financial literacy levels, with only 14.1% of black borrowers demonstrating financial literacy compared to 52.9% of white borrowers. In particular, we find that the variance in financial literacy can account for 15.2% of the racial disparity in mortgage stress, and achieving parity in financial literacy could reduce the racial gap by 24.9%. Furthermore, our analysis highlights that the racial disparity is most pronounced in states with low levels of social capital, underscoring the role of social capital in ameliorating racial disparities. Policies and initiatives aimed at enhancing the financial literacy and social capital of black borrowers can help narrow the racial gap in mortgage stress. |
| Keywords: | Financial literacy; Mortgage stress; racial disparity; Social Capital |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_7 |
| By: | Uzma Zia (Pakistan Institute of Development Economics) |
| Abstract: | Savings play an essential role in economic growth and development as it provides resources for investment and financial stability. Pakistan, like many developing economies, faces challenges in promoting a robust savings culture. This study examines key determinants of savings behaviour, including macroeconomic factors, fiscal policies, interest rates, inflation, remittances, and religious beliefs. Findings suggest that enhancing financial literacy, offering tax incentives, and ensuring economic stability can boost savings. Policies to manage inflation and improve real interest rates are vital for encouraging household savings. The study also highlights theoretical insights, such as the Harrod-Domar model and the Permanent Income Hypothesis, underscoring the link between savings, investment, and long-term growth. To enhance savings, the government should adopt both short- and long-term initiatives, such as expanding financial literacy programs and promoting investment-oriented savings schemes. Tax and duty reductions for productive industries for encouragement may lead to higher savings. Ensuring financial stability, controlling inflation, and strengthening institutions are important for building saver`s confidence. Similarly, higher real interest rates encourage savings while inflation erodes their value emphasising effective inflation management essential for to build saving culture in Pakistan. As controlling inflation remains a key policy objective of URAAN project, this study indicates that higher savings are possible with decline in inflation in Pakistan. Consequently, an increase in savings is expected as inflation decreases. Moreover, higher savings can support the government in achieving its economic growth targets. |
| Keywords: | Harrod-Domar Model, Permanent Income Hypothesis, Savers Confidence, Savings Behaviour, Savings Culture, URAAN |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pid:wpaper:2025:5 |
| By: | Collins, J. Michael (University of Wisconsin-Madison); Urban, Carly (Montana State University) |
| Abstract: | Research documents the positive effects of state-required financial education in high school on downstream financial outcomes but pools different types of mandates. Do state policies embedding personal finance content into another course have the same effect as those that require a standalone course? This paper considers the relative effects of the two policy levers on credit scores and subjective financial well-being, using data from states implementing these policies in similar years. Our results show that states requiring a full semester of coursework improve both credit scores and subjective measures of financial well-being, while states allowing more flexibility in implementing personal finance coursework into other classes do not. |
| Keywords: | financial well-being, household finance, financial education, credit scores |
| JEL: | D12 D14 D15 G53 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18268 |
| By: | Chauhan, Sonalee; Varma, Poornima; Singh, Sukhpal |
| Abstract: | Strengthening smallholder market linkages is critical for transitioning from high-risk and low revenue generating subsistence farming to more commercial and profitable agriculture. However, market access for smallholders in India presents a wide range of challenges such as inadequate access to credit and output markets, low marketable surplus and high transaction costs, information asymmetry, high-quality requirements, and presence of interlocked markets. This study explores the key factors influencing smallholders market participation and extent of participation. It also examines determinants of smallholder’s choice of paddy marketing channels available in the study region. Simultaneous equations and multinomial logit models are used to conduct the analysis for the cross-sectional data of paddy smallholders in Uttar Pradesh. Results indicate that smallholder resource endowment namely access to credit and extension services, farm size, access to off-farm income sources and transportation facilities; transaction costs factors such as market distance, paddy quantity and payment time along with membership of farmer organization influence market participation and channel choice decision Findings stress the need for formulating policies that focus on improving transportation and road infrastructure, extension services and promote financial inclusion of resource poor smallholders. Institutional support in ensuring timely payment can facilitate smallholders’ inclusion in profitable marketing channels. Furthermore, policies aimed at promoting farmer producer organizations and strengthening public procurement is recommended. |
| Keywords: | Marketing |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:iaae24:344325 |
| By: | Mangave, Darshan |
| Abstract: | Economy of India is growing rapidly, but income inequality remains the major concerns. The study focuses on understanding the patterns, causes, consequences, and effects of income inequality in India. In terms of income equality, Japan and Germany are the global giants; hence, the study also analyses how India can learn from their experiences in achieving inclusive growth. The research uses secondary data such as Gini Coefficient, per capita income, and wealth distribution. To explain the relationship between economic growth and inequality, the Kuznets Curve theory is applied. The role of human capital (education, skills, and productivity) is highlighted as a key factor in reducing inequality. The Findings show that inequality in India is driven by unequal access to education, healthcare, and technology. India’s major resources and wealth are concentrated among the top 1% of the population. The research provides insights into how Japan and Germany reduced inequality through strong education systems, social welfare, and industrial inclusion. The study suggests that India can reduce income inequality by improving the quality of education and skill development, encouraging rural entrepreneurship, adopting progressive taxation policies, and promoting digital inclusion to ensure equal access to economic opportunities. The study concludes that reducing inequality is essential for achieving sustainable and inclusive growth in India. |
| Keywords: | Income Inequality, Wealth Distribution, Per Capita Income, Gini Coefficient, Human Capital, Regional Disparity, Urban-Rural Divide, Education and Skill Development, Technological Gap, Policy Imbalance, Capital-Intensive Growth, Inclusive Development, Economic Growth, Social Equity, India |
| JEL: | D31 D63 I24 J31 O15 |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126773 |