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on Financial Literacy and Education |
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Issue of 2018‒06‒18
four papers chosen by |
| By: | Francesco C. Billari; Carlo A. Favero; Francesco Saita |
| Abstract: | In this article, we present and test experimentally a low-cost, Internet-based, financial literacy program that we designed for implementation with the largest industrial pension fund in Italy. The program, Finlife (Financial Education and Planning for a Long Life) included 1) an instructional video and materials on financial, and demographic, literacy, provided online; 2) an experimental design that explicitly allows to evaluate the impact of the online content on financial and demographic literacy, as well as on short-term behavioral changes; 3) a follow-up that allows to assess the stability of some of the experimental outcomes. Finlife was designed to be a low-cost and scalable approach to increase financial and demographic literacy, consistently with a ‘nudge’ philosophy. Our findings show that Finlife delivered a substantially and statistically significant increase in financial and demographic literacy, as well as a push towards seeking more information on financial markets and choices related to financial planning. |
| Keywords: | financial literacy, demographic literacy, field experiment, Finlife |
| JEL: | D91 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp1767&r=fle |
| By: | Chai, Shijun (Asian Development Bank Institute); Chen, Yang (Asian Development Bank Institute); Huang, Bihong (Asian Development Bank Institute); Ye, Dezhu (Asian Development Bank Institute) |
| Abstract: | Using the 2011 China Household Finance Survey (CHFS) database, we explore the heterogeneous impacts of social networks on informal financial inclusion for urban and rural households in the People’s Republic of China. We find that social networks significantly increase the probability of households’ participation in the informal financial market, augment the size of informal financial transactions, and raise the ratio of informal lending to total household assets. We also identify the mechanisms through which social networks affect households’ participation in the informal financial market. By reducing the information cost, perceived risk, and precautionary saving, social networks play a larger role for urban households than for rural households. Notably, the effects of social networks on informal finance are strengthened by the development of the formal financial market. |
| Keywords: | social networks; informal financial inclusion; perceived risk; precautionary saving; formal financial market |
| JEL: | D10 G20 |
| Date: | 2018–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0802&r=fle |
| By: | Entorf, Horst (Goethe University Frankfurt); Hou, Jia (Goethe University Frankfurt) |
| Abstract: | In contrast to the popularity of financial education interventions worldwide, studies on the economic effects of those interventions report mixed results. With a focus on the effect on disadvantaged groups, we review both the theoretical and empirical findings in order to understand why this discrepancy exists. The survey first highlights that it is necessary to distinguish between the concepts of, and the relationships between, financial education, financial literacy and financial behavior to identify the true effects of financial education. The review addresses possible biases caused by third factors such as numeracy. Next, we review theories on financial literacy which make clear that the effect of financial education interventions is heterogeneous across the population. Last, we look closely at main empirical studies on financial education targeted at the migrants/immigrants, the low-income earners and the young, and compare their methodologies. There seems to be a positive effect on short-term financial knowledge and awareness of the young, but there is no proven evidence on long-term behavior after being grown up. Studies on financial behavior of migrants and immigrants show almost no effect of financial education. |
| Keywords: | financial education, financial literacy, inequality, program, evaluation |
| JEL: | G28 I24 I25 I28 |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11515&r=fle |
| By: | Pranab Kumar Das (Reserve Bank of India Professor of Industrial Economics, Centre for Studies in Social Sciences, Calcutta(CSSSC).); Bhaswati Ganguli (Department of Statistics, University of Calcutta); Sugata Marjit (Centre for Studies in Social Sciences, Calcutta(CSSSC).); Sugata Sen Roy (Department of Statistics, University of Calcutta) |
| Abstract: | The paper critically inquires the ‘finance-growth-inequality’ nexus based on an econometric analysis of the IHDS Survey data for two rounds – 2005-06 and 2011-12. The study attempts to assess the co-evolution of finance-growth-inequality in an intertemporal framework. At the household level asset is still the most important determinant of bank loans inspite of several policy measures aimed at financial inclusion. However, the probability of receiving a bank loan increases if any member of the household is active participant of the local level government or caste association. The most important finding of the paper pertains to the econometric result that the household asset grows at the same rate independent of the source of loans - banks or informal moneylenders though the level effect (intercept) is higher if the loan is obtained from banks or lower if the household lives below poverty line. The same observation is also confirmed for per capita income of the households. The phenomenon is explained in a theoretical model of intertemporal choice of entrepreneur-investor to show that if there are both formal and informal sources of borrowing with a constraint on the formal sector borrowing and no constraint on the latter, then growth rates of asset and income are determined by the informal sector interest rate. This result can be generalised for any number of sources of borrowing. This questions the conventional wisdom regarding the policy aimed at financial inclusion. Inequality of income increases independent of the source of borrowing, though the households living below poverty line are worse off in general. If the major source of borrowing is bank for the business and industry then inequality increases more for the above poverty line households than if the major source is moneylenders or the households belong to the below poverty line category. Moneylenders as the source of borrowing is not as regressive as is believed. So the whole issue of financial inclusion needs a review in the light of the findings of the paper. |
| Keywords: | Financial development, Financial Inclusion Growth, Inequality, Bank, India, IHDS, Logit Model |
| JEL: | C35 E5 G21 O11 |
| Date: | 2018–05–22 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:593&r=fle |