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on Financial Literacy and Education |
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Issue of 2022‒11‒21
six papers chosen by |
| By: | Corpus, John Paul; Debuque-Gonzales, Margarita |
| Abstract: | Financial inclusion can help curb poverty, reduce inequality, and potentially enhance productivity and long-term growth. However, empirical research on financial inclusion remains limited, particularly at the country level. To fill this gap, this paper conducts an empirical exploration of financial inclusion in the Philippines. Its specific objectives are to: (1) benchmark financial inclusion in the Philippines versus other countries in developing Asia; (2) capture stylized facts about financial inclusion in the country based on analysis of demand-side data; and (3) construct a subnational financial inclusion index that can be used, moving forward, to estimate the links of financial inclusion with economic growth, development, and financial stability. The Philippines leads comparator countries in terms of the enabling environment, has mixed performance in financial outreach, and lags in financial account ownership and usage. Less than 15 percent of adults in the country save money using a formal account, while less than a tenth use formal credit, among the lowest proportions in the region. In terms of stylized facts, we find that greater education, higher income, being female, being employed, and being older (up to a certain point) make financial inclusion, particularly formal account ownership and credit use, more likely. Fintech in the form of mobile money appears promising with seemingly the most equitable access among the different forms of financial inclusion, although account ownership remains scant and limited to more urbanized areas. Individuals with less education and those coming from lower-income households are more likely to be "involuntarily" excluded from the formal financial sector. To construct a subnational financial inclusion index, this paper makes use of supply-side data on outreach and usage of financial services in Philippine regions, with weights derived via principal component analysis. The computed regional index is positively associated with GDP per capita, literacy, and electricity access, and negatively associated with poverty incidence, in line with the demand-side analysis and reasonable expectations about the relationship between financial inclusion and development indicators. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph |
| Keywords: | Financial inclusion; financial inclusion index |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2021-37&r=fle |
| By: | Javier Olivera (Pontificia Universidad Católica del Perú.); Yadiraah Iparraguirre (Pontificia Universidad Católica del Perú.) |
| Abstract: | We study the gender gap in pension funds in Peru, a country where the main pension system is based on individual retirement accounts. We exploit randomly selected samples of administrative pension fund individual registers collected between 2005 and 2019 and find a gender gap in favour of men at each percentile of the distribution of pension funds. The unconditional gender gap decreases along the percentiles until it reaches a sort of “glass ceiling” around the 85th percentile, and then it increases substantially. We also detect heterogeneity by birth cohorts, indicating that older cohorts show higher gender gaps in pension saving because of the capitalization process. Moreover, we find that awareness about pension fund risk management –a proxy for financial literacy– increases the dispersion of pension savings over the distribution and, therefore, increases inequality and the gender gap. This situation is aggravated by the fact that Peru has very low levels of financial literacy JEL Classification-JE: D31, G23, J16, J32. |
| Keywords: | Gender gap, Pension savings, Financial literacy, Unconditional quantile, Peru. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pcp:pucwps:wp00513&r=fle |
| By: | Abhinav Shanbhag |
| Abstract: | Americans across demographic groups tend to have low financial literacy, with low-income people and minorities at highest risk. This opens the door to the exploitation of unbanked low-income families through high-interest alternative financial services. This paper studies the causes and effects of financial illiteracy and exclusion in the most at-risk demographic groups, and solutions proven to bring them into the financial mainstream. This paper finds that immigrants, ethnic minorities, and low-income families are most likely to be unbanked. Furthermore, the causes for being unbanked include the high fees of bank accounts, the inability of Americans to maintain bank accounts due to low financial assets or time, banking needs being met by alternative financial services, and being provided minimal help while transitioning from welfare to the workforce. The most effective solutions to financial illiteracy and exclusion include partnerships between nonprofits, banks, and businesses that use existing alternative financial service platforms to transition the unbanked into using products that meet their needs, educating the unbanked in the use of mobile banking, and providing profitable consumer credit products targeting unbanked families with features that support their needs in addition to targeted and properly implemented financial literacy programs. |
| Date: | 2022–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2210.11403&r=fle |
| By: | Quimba, Francis Mark A.; Barral, Mark Anthony A.; Carlos, Jean Clarisse T. |
| Abstract: | FinTech in the Philippines has been gaining more attention in recent years, especially during the onset of the COVID-19 pandemic when lockdowns are prevalent and cashless payment methods are encouraged to limit exposure to health risks from face-to-face and cash-based transactions. Digital payments and digital engagements of both men and women have increased, and more and more bank and nonbank financial service providers have entered the digital space, providing more diversified financial products and services through various platforms. Despite these developments, however, the industry financial inclusion in the Philippines remains lagging behind compared to ASEAN neighbors. In addition, FinTech has faced concerns pertaining to the reliability and consistency not only of the systems but also of the regulations. With the financial sector being heavily disrupted by digitalization, there is more to look into than defining FinTech elements and considering it as just another service innovation. Defining the interplay across the stages of FinTech transformation does not seem to be well explored in the Philippines. This paper explores the state of the industry and investigates how to support the development of the ecosystem to ensure that FinTech helps in the achievement of the country’s development goals. This paper finds that the Philippines has a strong FinTech industry as indicated by an increasing number of FinTechs (particularly in payments, lending, and banking technology verticals) and increasing capitalization. The FinTech industry can support the country’s goals of financial inclusion but there needs to be an improvement in areas of availability of talent and credit for the sector. Comments to this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph |
| Keywords: | business models; financial literacy; financial inclusion; e-money; fintech; FinTech ecosystem; lending |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2021-29&r=fle |
| By: | Pimkina, Svetlana; de La Flor, Luciana |
| Abstract: | Women comprise half of the world’s adult population, and therefore potentially half of its labor force. Removing barriers that restrict women from entering the labor market is crucial for achieving equality, as well as to untap economic growth. The focus of this review is on female labor force participation (FLFP) instead of employment. Labor force participation captures the decision to actively engage with the labor market, while employment represents an equilibrium outcome. The distinction is often underemphasized, but it is not trivial, as these indicators move separately. Indeed, the global rate of female employment has remained high at around 94 percent, while the rate of FLFP has not yet surpassed 50 percent. This review identifies constraints around three key drivers of FLFP. First, the authors examine how constraints in endowments such as time, education, financial and social capital limit women’s participation. Second, authors review evidence on the role of internal factors such as choices, preferences, norms and beliefs on FLFP. Third, authors discuss how external constraints such as income shocks and demand-side factors inhibit active engagement in the labor market. Finally, the paper concludes with some lesson learned from policies to improve FLFP and draws up an agenda for future research. |
| Keywords: | female labor force participation; female labor force participation rates; labor force participation by gender; access to financial products; active labor force participant; access to basic service; gender gap in education; Levels of Educational Attainment; school to work transition; conditional cash transfer program; Labor Market; female labor supply; job training program; access to finance; working age population; labor market outcome; labor market participation; long-term care insurance; labor market activity; labor supply decisions; labor market opportunities; increase in labor; demands on women; skills and education; terms of skills; diffusion of technology; age of marriage; female labor market; women in society; time and resource; barrier to woman; total fertility rate; years of schooling; literacy and numeracy; access to child; social protection scheme; expansion of education; girls with stipend; women with child; highly educated women; birth control pill; human capital accumulation; demand for consumption; global financial crisis; child care cost; care for child; access to network; share of work; proportion of woman; work at home; access network; rates of participation; part time work; access to infrastructure; gender sensitive indicator; research on woman; flexible work arrangement; equal employment opportunity; term of productivity; quality of employment; change in demand; lack of opportunity; empowerment for woman; access to capital; vocational training program; formal financial market; avenue for woman; achieving gender equality; number of assets; privileges and immunity; incentive for employer; labor market entry; skill training programs; female employment; employment rate; negative effect; elderly care; instrumental variable; financial inclusion; positive impact; fertility decline; empirical literature; labor participation |
| Date: | 2020–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:jbsgrp:32675027&r=fle |
| By: | Grover,Arti Goswami; Imbruno,Michele |
| Abstract: | Countries design programs for supporting firms, with varying levels of success. Firmgrowth is constrained by several factors, such as low firm capabilities (e.g. management), availability of finance, andaccess to markets. Based on the available experimental evidence on firm support programs in developing countries,this paper makes three broad observations. First, there are huge knowledge gaps in understanding the success ofinstruments that alleviate firm constraints. Various instruments, such as early-stage equity finance, incubators,and accelerators, remain untested due to the lack of good design, results framework, or monitoring and evaluationsystems and so on. Second, since these interventions are expensive, policy makers expect such programs to be designedmore effectively to pursue their objectives. However, evidence provides little guidance on the criterion for firmselection because the existing evaluations of instruments reveal little information on the heterogeneous impact byfirm characteristics, such as the age, size, sector, and locationof firms. Third, most interventions seek to address only one of the broad constraints faced by firms. To thisend, the paper concludes with a novel proposal for a firm support program that attempts to sequentially addressmultiple constraints to firm growth. This program will be implemented in Malawi through the "Financial Inclusionand Entrepreneurship Scaling" project. |
| Keywords: | Financial Sector Policy,Skills Development and Labor Force Training,Private Sector Economics,Private Sector Development Law,Marketing,Labor Markets |
| Date: | 2020–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:9461&r=fle |