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on Financial Literacy and Education |
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Issue of 2020‒12‒14
eight papers chosen by |
| By: | Ugo Albertazzi (ECB -DG Monetary Policy); Fulvia Fringuellotti (Federal Reserve Banks - Federal Reserve Bank of New York); Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; Centre for Economic Policy Research (CEPR)) |
| Abstract: | Why do residential mortgages carry a fixed or an adjustable interest rate? To answer this question we study unique data from 103 banks belonging to 73 different banking groups across twelve countries in the euro area. To explain the large cross-country and time variations observed, we distinguish between household conditions that determine the local demand for credit and the characteristics of banks that supply credit. As bank funding mostly occurs at the group level, we disentangle these two sets of factors by comparing the outcomes observed for the same banking group across the different countries. Local household conditions dominate. In particular we find that the share of new loans with a fixed rate is larger when: (1) the historical volatility of inflation is lower, (2) the correlation between unemployment and the short-term interest rate is higher, (3) households' financial literacy is lower, and (4) the use of local mortgages to back covered bonds and of mortgage-backed securities is more widespread. |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2099&r=all |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Rexon T. Nting (University of Wales, London, UK) |
| Abstract: | The study has investigated the comparative importance of financial access in promoting gender inclusion in African countries. Gender inclusion is proxied by the female labour participation rate while financial channels include: financial system deposits and private domestic credit. The empirical evidence is based on non-contemporary Fixed Effects regressions. In order to provide more implications on comparative relevance, the dataset is categorised into income levels (middle income versus (vs.) low income); legal origins (French civil law vs. English common law); religious domination (Islam vs. Christianity); openness to sea (coastal vs. landlocked); resource-wealth (oil-poor vs. oil-rich) and political stability (stable vs. unstable). Six main hypotheses are tested, notably, that middle income, English common law, Christianity, coastal, oil-rich and stable countries enjoy better levels of “financial access†-induced gender inclusion compared to respectively, low income, French civil law, Islam, landlocked, oil-poor and unstable countries. All six tested hypothesis are validated. This is the first study on the comparative importance of financial access in gender economic participation. |
| Keywords: | Inequality; Gender Inclusion; Financial development; Africa |
| JEL: | I30 L96 O16 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:20/089&r=all |
| By: | Beretta, Edoardo; Neuberger, Doris |
| Abstract: | By "hostility to cash" we refer to the recent trend of incentivizing individuals towards a (privately managed) digital payment system driven by banking and financial sectors and supported by Governments. COVID-19 has on the one hand boosted this movement, with false messages about banknotes spreading the virus as a new instrument of convincement. On the other, the enduring flight to cash shows that this "relic" is even more essential in bad economic times. Restricting or eliminating cash is synonymous of welfare losses due to increased monopoly power of the financial and technology industry, reduced privacy, and threatened financial stability as a public good. As a consequence, financial exclusion and social discrimination would increase, adding to the impact of the COVID-19 crisis on inequality. By means of a logical-analytical approach combined with the newest statistical evidence and never-published comparative tables, the paper demonstrates why banknotes and coins are - all the more, in uncertain times due to SARS-CoV-2 - not otherwise substitutable, but rather a public good to be safeguarded. |
| Keywords: | banknotes and coins,COVID-19,digital payments,financial inclusion,money,payments system |
| JEL: | E42 E44 G21 G41 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:roswps:166&r=all |
| By: | Dalton, Patricio (Tilburg University, School of Economics and Management); Pamuk, H. (Tilburg University, School of Economics and Management); Ramrattan, R.; van Soest, Daan (Tilburg University, School of Economics and Management); Uras, Burak (Tilburg University, School of Economics and Management) |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutis:98cf0741-8e78-4bba-a270-4b1ee857cd39&r=all |
| By: | Dong, Hao (Southern Methodist University); Millimet, Daniel L. (Southern Methodist University) |
| Abstract: | Estimation of the causal effect of a binary treatment on outcomes often requires conditioning on covariates to address selection on observed variables. This is not straightforward when one or more of the covariates are measured with error. Here, we present a new semi-parametric estimator that addresses this issue. In particular, we focus on inverse propensity score weighting estimators when the propensity score is of an unknown functional form and some covariates are subject to classical measurement error. Our proposed solution involves deconvolution kernel estimators of the propensity score and the regression function weighted by a deconvolution kernel density estimator. Simulations and replication of a study examining the impact of two financial literacy interventions on the business practices of entrepreneurs show our estimator to be valuable to empirical researchers. |
| Keywords: | program evaluation, measurement error, propensity score, unconfoundedness, financial literacy |
| JEL: | C18 C21 G21 G53 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13893&r=all |
| By: | Hao Dong (Southern Methodist University); Daniel L. Millimet (Southern Methodist University) |
| Abstract: | Estimation of the causal effect of a binary treatment on outcomes often requires conditioning on covariates to address selection on observed variables. This is not straightforward when one or more of the covariates are measured with error. Here, we present a new semi-parametric estimator that addresses this issue. In particular, we focus on inverse propensity score weighting estimators when the propensity score is of an unknown functional form and some covariates are subject to classical measurement error. Our proposed solution involves deconvolution kernel estimators of the propensity score and the regression function weighted by a deconvolution kernel density estimator. Simulations and replication of a study examining the impact of two financial literacy interventions on the business practices of entrepreneurs show our estimator to be valuable to empirical researchers. |
| Keywords: | Program evaluation, measurement error, propensity score, unconfoundedness, financial literacy. |
| JEL: | C18 C21 G21 G53 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:smu:ecowpa:2013&r=all |
| By: | Guérin, Isabelle (IRD); Nordman, Christophe Jalil (IRD, DIAL, Paris-Dauphine); Reboul, Elena (IRD) |
| Abstract: | The champions of financial inclusion regret women’s lack of access to credit, while critics of financialization, by contrast, claim that women have become overly indebted. But little is actually known about women’s debt/credit in quantitative terms, mostly due to a lack of data. This descriptive paper uses first-hand survey data from southern India disaggregated by sex in order to analyze the gender of debt and its interplay with caste and poverty, based on descriptive statistics and econometric results. We show that women are heavily indebted, first and foremost to informal sources, alongside microcredit. While men are much higher earners, they borrow much less in relative terms. Furthermore, women prominently - and markedly more so than men - borrow in order to make ends meet; productive investment largely remains a male practice. Lastly, women of the poorest and lowest-caste households have the heaviest borrowing responsibilities, managing the highest proportions of household debt. On a theoretical level, these results highlight the gendered earmarking of debt and credit: male and female debts/credits do not have the same meanings and uses. They also confirm the gendered dimension of behavior, in as much as women's behavior is constrained by family affiliation, poverty level and caste, all of which affects men much less. Last, in terms of policy implications, these results put into question the specific targeting of women by microcredit policies, likely to strengthen the association between debt and poverty for women, and in particular to exacerbate female responsibilities for managing scarcity. |
| Keywords: | gender, debt, poverty, caste, microcredit, India |
| JEL: | G51 O16 J16 D14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13891&r=all |
| By: | Joana Silva Afonso (Portsmouth Business School) |
| Abstract: | Heterogeneity associated with the microfinance and financial inclusion sector discourages the application of ‘one-fits-all’ evaluation models. However, under certain conditions, there can be advantages in adopting a ‘common project approach’ to evaluation. This paper is based on my participation as academic consultant on a project led by the crowdfunding platform Lendwithcare, which aimed to assess the outcomes at client level of two microcredit programmes developed by its partner microfinance institutions in Pakistan and Zimbabwe. Applying qualitative methodologies, including participant-observation and interviews, I analyse the conditions in which some degree of standardisation is feasible, its advantages and limitations and how this experience can add to the knowledge on impact evaluation and social performance assessment in the sector. In doing so, I establish a parallel with previous evaluation projects in the sector, namely the AIMS, Imp-Act and Microfinance for Decent Work projects. The findings show that the approach followed in the Lendwithcare project contributed to change mind-sets regarding evaluation and trigger the process of social performance management in the participating institutions, which had incipient experience in measuring social performance and were not familiar with the evaluation process. It attracted also the attention of other Lendwithcare partner MFIs whose managers showed interest in replicating the process in their institutions. |
| Date: | 2020–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:pbs:ecofin:2020-14&r=all |