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on Financial Literacy and Education |
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Issue of 2023‒05‒22
nine papers chosen by |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | The present study investigates how increasing bank accounts and bank concentration affect mobile money innovations in 148 countries. It builds on scholarly and policy concerns in the literature that increasing bank accounts may not be having the desired effects on financial inclusion on the one hand and on the other, that bank concentration which is a proxy for market power is a relevant mobile money innovation demand factor. The empirical evidence is based on Tobit regressions. From the findings, it is apparent that boosting bank accounts is positively related to the three mobile money innovations (i.e. mobile bank accounts and the mobile phone used to send money). Moreover, some critical levels of bank account penetration require complementary policies in order to maintain the positive relationship between boosting bank accountsand positive outcomes in terms of money mobile innovations.Conversely, financial inclusion in terms of the three mobile money innovations is not significantly apparent upon enhancing bank concentration. Policy implications are discussed in the light of the provided thresholds for complementary policies. |
| Keywords: | Mobile money; technology; diffusion; financial inclusion; inclusive innovation, information asymmetry |
| JEL: | D10 D14 D31 D60 O30 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:23/019&r=fle |
| By: | Matthias Sutter (Max Planck Institute for Research on Collective Goods, Bonn, University of Cologne, University of Innsbruck, IZA Bonn, and CESifo Munich); Michael Weyland (Ludwigsburg University of Education); Anna Untertrifaller (University of Cologne); Manuel Froitzheim (University of Siegen); Sebastian O. Schneider (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | We present the results of a randomized intervention to study how teaching financial literacy to 16-year old high-school students affects their behavior in risk and time preference tasks. Compared to two different control treatments, we find that teaching financial literacy makes subjects behave more patiently, more time-consistent, and more risk-averse. These effects persist for up to almost 5 years after our intervention. Behavior in the risk and time preference tasks is related to financial behavior outside the lab, in particular spending patterns. This shows that teaching financial literacy affects economic decision-making which in turn is important for field behavior. |
| Keywords: | Financial literacy, randomized intervention, risk preferences, time preferences, financial behavior, field experiment |
| JEL: | C93 D14 I21 |
| Date: | 2023–05 |
| URL: | http://d.repec.org/n?u=RePEc:ajk:ajkdps:229&r=fle |
| By: | Alberto Bucci (Department of Economics, Management and Quantitative Methods (DEMM) - University of Milan, and ICEA (International Center for Economic Analysis, Canada); Riccardo Calcagno (Department of Management and Production Engineering, Polytechnic University of Turin); Simone Marsiglio (Department of Economics and Management, University of Pisa); Tiago Miguel Guterres Neves Sequeira (University of Coimbra, Centre for Business and Economics Research, CeBER and Faculty of Economics) |
| Abstract: | We extend a two-sector endogenous growth model based on human capital accumulation along two different directions. First, by postulating that individuals may invest time-resources not only in the accumulation of human capital (general knowledge) but also in the accumulation of financial literacy (specific financial knowledge). Second, we maintain that the efficiency with which savings are transferred intertemporally may improve over time, e.g. through the presence of a financial system. We use the model to analyze the relationship between financial literacy and economic growth in the long run. We show that the properties of the balanced growth path equilibrium critically depend on how human capital and financial literacy affect the efficiency of the financial system. Moreover, finance promotes long-run economic growth through two alternative channels, driven either by dynamics of financial returns or by human capital accumulation, respectively. By calibrating the model to the US economy over the 1950-2019 period, we quantitatively assess the effect of financial literacy on long-term growth and the relative magnitude of the two channels. |
| Keywords: | Economic Growth, Financial Literacy, Financial Return, Human Capital. |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:papers:2022-08&r=fle |
| By: | Ginevra Buratti (Bank of Italy); Alessio D'Ignazio (Bank of Italy) |
| Abstract: | We investigate whether targeting algorithms can improve the effectiveness of financial education programs by identifying the most appropriate recipients in advance. To this end, we use micro-data from approximately 3, 800 individuals who recently participated in a financial education campaign conducted in Italy. Firstly, we employ machine learning (ML) tools to devise a targeting rule that identifies the individuals who should be targeted primarily by a financial education campaign based on easily observable characteristics. Secondly, we simulate a policy scenario and show that pairing a financial education campaign with an ML-based targeting rule enhances its effectiveness. Finally, we discuss a number of conditions that must be met for ML-based targeting to be effectively implemented by policymakers. |
| Keywords: | financial education, machine learning, policy targeting, randomized controlled trials |
| JEL: | C38 I21 G5 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_765_23&r=fle |
| By: | Milo Bianchi; Matthieu Bouvard; Renato Gomes; Andrew Rhodes; Vatsala Shreeti |
| Abstract: | We connect various streams of academic literature to analyze how alternative competition and regulatory policies may affect the development of digital financial services, and particularly of mobile payments. Our main objective is to highlight the extent to which existing models, often coming from related industries (such as telecom, payments, and banking) can be applied to study the effects of mobile money interoperability. We focus on four dimensions of interoperability. First, we consider mobile network interoperability (whether clients of one telecom can access another telecom's payment services) in connection with the IO literature on tying. Second, we discuss platform level interoperability (the ability to send money off-network) in light of the literature on compatibility. We also build on the behavioral IO literature to suggest how the effects of interoperability may be very heterogeneous across various types of firms and consumers, or even backfire. Third, we consider interoperability in the cash-in-cash-out agent network, in light of the literature on co-investment in network industries, and of more specific studies on ATMs' interoperability. Fourth, we discuss how the literature in banking and on data ownership can be used to understand interoperability of data. We conclude with some broader remarks on policy implications and on possible directions for future research. |
| Keywords: | mobile payments, interoperability, financial inclusion, competition policy |
| JEL: | L51 L96 G23 G28 O16 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:1092&r=fle |
| By: | Zheng, Yeqiu; Gu, Yan; van Soest, Arthur |
| Abstract: | We study pension planning and financial wealth of natives and immigrants (N=1177) in the Netherlands, in relation to their temporal values (past/future-focused), financial knowledge, IQ, and other individual characteristics. We find that, compared to natives, immigrants are less financially literate and rely more on the government for their retirement income, but are more future-focused and think more about their retirement. Second, controlling for financial knowledge, IQ, saving intention, health, self-control and demographic factors, temporal values help to predict many aspects of pension planning: how much people think about retirement, their desired retirement age, whether they develop a plan to save for retirement, perceived saving adequacy, and home ownership. Furthermore, temporal values predict savings and financial wealth in 2016 and 2020, even after controlling for the financial situation in 2016. In conclusion, habitually attending to the past leads people to give less priority to the future compared to the past, which has consequences for people’s planning and behaviour such as retirement planning and financial well-being. Our results have strong implications for policies related to pension communication and contribute to the theory on relationships between economic decisions, time and cognition. |
| Date: | 2023–04–13 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:6cwk7&r=fle |
| By: | Sara Lamboglia (Bank of Italy); Massimiliano Stacchini (Bank of Italy) |
| Abstract: | Individual characteristics, such as educational background, are important but insufficient to explain variation in financial skills among people. Using repeated cross-sectional survey data on over 145, 000 individuals aged 50+ and resident in 20 European countries and Israel combined with historical country-level data, we explore the role that selected country characteristics play in stimulating financial awareness. We find a lasting effect of social mobility on financial skills: individuals who spent early adulthood in countries characterized by high intergenerational mobility proved to be more financially literate than their peers as they age. The effect is economically sizable, especially among women and individuals from disadvantaged backgrounds. The results hold in models that use country-specific cohort effects to absorb context confounders and common shocks. Our findings suggest that promoting equality of opportunities across generations is not only ethically desirable but can also enhance socially valuable spillovers such as the accumulation of skills among vulnerable citizens. |
| Keywords: | financial literacy, intergenerational mobility, gender gap |
| JEL: | G53 J62 |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_766_23&r=fle |
| By: | Simplice A. Asongu (Yaounde, Cameroon); Sara le Roux (Oxford Brookes University, Oxford, UK) |
| Abstract: | The study examines how mobile money innovations transform unemployed women to self-employed women. The empirical evidence is based on interactive quantile regressions focusing on data in 44 countries from sub-Saharan Africa for the period 2004 to 2018. The hypothesis that mobile money innovations transform female unemployment to female self-employment is tested. Eight mobile money innovation dynamics presented in four categories are employed. Three main common findings are apparent from interactions between female unemployment, eight mobile money innovation dynamics and female self-employment: (i) the investigated hypothesis is valid exclusively at the top quantiles of female self-employment; (ii) the net effects are consistently negative and (iii) the corresponding conditional or interactive effects upon which the net effects are based are consistently positive. This is an indication that critical masses at which money innovation innovations have an overall positive net effect on female self-employment are apparent. The corresponding mobile money innovation policy thresholds at which the net effects on female self-employment change from negative to positive are provided. Policy implications are discussed. |
| Keywords: | Mobile phones; financial inclusion; women; inequality; sub-Saharan Africa |
| JEL: | G20 O40 I10 I20 I32 |
| Date: | 2023–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:23/016&r=fle |
| By: | Asongu, Simplice A; Odhiambo, Nicholas M |
| Abstract: | This study complements the extant literature by assessing economic sector and globalization channels for gender economic inclusion. The study is focused on 35 countries in sub-Saharan Africa for the period 1995-2019 and the empirical evidence is based on fixed effects regressions. The following findings are established. First, economic and political globalization positively affect female employment in agriculture and the positive effect of economic globalization is driven by the trade globalization dynamic while social globalization negatively affects female employment in agriculture and the negative effect of social globalization is driven by cultural and informational globalization dynamics. Second, aggregate globalization and sub-components (i.e. economic globalization, social globalization and political globalization) negatively affect gender employment in the industry and the negative effect is driven by the financial globalization sub-component of economic globalization and by the informational and cultural components of social globalization. Third, aggregate globalization and sub-components positively affect gender employment in the service sector and the corresponding positive effect is driven by the trade globalization sub-component of economic globalization and by all sub-components (i.e. interpersonal, informational and cultural dimensions) of social globalization. In the terms of policy implications, policy makers should focus on promoting dimensions of globalization that are established to positively influence female employment as well as put in place measures that are designed to reverse the negative incidence of globalization dynamics that have been established to affect female employment. Moreover, policy makers should also be aware of the fact that when formulating the corresponding policies, the effect of globalization is contingent on globalization dynamics as well as on various economic sectors. |
| Keywords: | Mobile money; technology; diffusion; financial inclusion; inclusive innovation, information asymmetry |
| Date: | 2023–04 |
| URL: | http://d.repec.org/n?u=RePEc:uza:wpaper:29950&r=fle |