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on Financial Literacy and Education |
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Issue of 2024‒06‒24
seven papers chosen by |
| By: | Damane, Moeti; Ho, Sin-Yu |
| Abstract: | We examine the impact of financial inclusion of Sub-Saharan Africa (SSA) small and medium-sized enterprises (SMEs) on financial stability. Results show that financial inclusion of SMEs negatively affects stability in SSA countries, and the negative link is even stronger as levels of financial stability increase across countries. Our findings are consistent with the theory of excessive credit expansion or extreme financial inclusion theory, suggesting that to safely promote SME financial inclusion and foster financial sector stability, efforts should be directed toward improving banking sector risk mitigation efforts, financial sector supervision and strengthening coordination among regional financial sector regulators. |
| Keywords: | Sub-Saharan Africa; Financial Inclusion; Financial Stability; Small and Medium sized Enterprises, Fixed Effect Model; Quantile Regression |
| JEL: | G00 G2 G21 G28 |
| Date: | 2024–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:121093&r= |
| By: | Broader, Jacquelyn |
| Abstract: | In the United States, public transit agencies are increasingly growing interested in deploying open-loop payment systems for public transit fare payments. This interest is based on the benefits these systems can offer, from faster boarding times to the potential of attracting more riders. Open-loop fare payment systems’ popularity is evidenced by the growing number of American public transit agencies who have deployed them; most of whom (63%) are located in California. The overlap between public transit riders who are both transit-dependent and financially excluded (i.e., have no or limited access to financial services) creates the opportunity for public transit agencies deploying open-loop payment systems to leverage these systems to increase financial service access for transit dependent, financially excluded riders. Individuals who are both transit-dependent and financially excluded are typically low-income, identify as part of a racial or ethnic minority group, immigrants, and/or women. As a result of these demographic characteristics, this work focuses on these populations. Additionally, financial inclusion, especially for these populations, is a critical step for economic and social mobility in the United States. This research focuses on California and explores how to leverage public transit agency deployment of open-loop payment systems to increase riders' financial service access. This research is comprised of a literature review, expert interviews (n=11), population needs mapping, and partnership proposals. In general, public transit agencies can strategically work with financial sector-based partners who focus on serving the transit agencies' priority rider groups. |
| Keywords: | Social and Behavioral Sciences, Public transit, automatic fare collection, transportation disadvantaged persons, low income groups, transportation equity |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt88v9c0wm&r= |
| By: | Qing Guo; Siyu Chen; Xiangquan Zeng |
| Abstract: | The proliferation of internet technology has catalyzed the rapid development of digital finance, significantly impacting the optimization of resource allocation in China and exerting a substantial and enduring influence on the structure of employment and income distribution. This research utilizes data sourced from the Chinese General Social Survey and the Digital Financial Inclusion Index to scrutinize the influence of digital finance on the gender wage disparity in China. The findings reveal that digital finance reduces the gender wage gap, and this conclusion remains robust after addressing endogeneity problem using instrumental variable methods. Further analysis of the underlying mechanisms indicates that digital finance facilitates female entrepreneurship by lowering financing barriers, thereby promoting employment opportunities for women and also empowering them to negotiate higher wages. Specially, digital finance enhances women's bargaining power within domestic settings, therefore exerts a positive influence on the wages of women. Sub-sample regressions demonstrate that women from economically disadvantaged backgrounds, with lower human capital, benefit more from digital finance, underscoring its inclusive nature. This study provides policy evidence for empowering vulnerable groups to increase their wages and addressing the persistent issue of gender income disparity in the labor market. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.15486&r= |
| By: | Altmejd, Adam (Stockholm University); Jansson, Thomas (Sveriges Riksbank); Karabulut, Yigitcan (Frankfurt School of Finance and Management) |
| Abstract: | Using university admission cutoffs that generate exogenous variation in college-major choices, we provide causal evidence that enrollment in a business or economics program leads individuals to invest significantly more in the stock market, earn higher portfolio returns, and ultimately accumulate higher levels of wealth later in life. Underlying these effects, beyond differences in risk-taking, innate ability, labor market outcomes, or scale effects, is the enhanced ability of business educated individuals to acquire and process economic information and make informed investment decisions. Early investments in financial literacy thus play an important role in generating higher returns that significantly alter individuals' life-cycle wealth profiles. |
| Keywords: | portfolio choice, financial literacy, portfolio returns, household wealth, returns to education, distribution of wealth |
| JEL: | G11 G51 G53 I26 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16976&r= |
| By: | David Aristei; Manuela Gallo; Raoul Minetti |
| Abstract: | This study provides first empirical evidence on the impact of entrepreneurs' financial knowledge on borrower discouragement. Using novel survey data on Italian micro-enterprises, we find that less financially knowledgeable entrepreneurs are more likely to be discouraged from applying for new financing, due to higher application costs and expected rejection. Our main results are robust to several sensitivity checks, including accounting for potential endogeneity. Furthermore, we show that the observed self-rationing mechanism is rather inefficient, suggesting that financial knowledge might play a key role in reducing credit market imperfections. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.05891&r= |
| By: | Ozili, Peterson K |
| Abstract: | This article presents a discussion on what a central bank digital currency (CBDC) can achieve in African countries and what a central bank digital currency may not achieve in African countries. The study shows that a central bank digital currency can achieve the following. CBDC can become a monetary policy tool; it can reduce the size of the informal economy; it can increase financial inclusion; it can increase digital financial literacy; it can reduce the circulation of counterfeit paper money; it can deepen existing payments system; it can improve social programmes and targeted welfare; it will increase transaction monitoring and surveillance; it can address tax evasion and increase tax revenue in African countries. The study also shows that a central bank digital currency may not completely replace cash in African countries; the issuance and use of CBDC won’t make African countries earn a ‘developed country’ status; CBDC adoption may not stop institutional corruption; CBDC adoption will not stop illicit activities in African countries; and CBDC adoption may not reduce the level of poverty in African countries. |
| Keywords: | central bank digital currency, CBDC, Africa, poverty, financial inclusion, monetary policy, remittance, informal economy, welfare, corruption. |
| JEL: | E52 E58 E59 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120966&r= |
| By: | Francesco Ferlaino |
| Abstract: | This study examines the redistribution effects of a conventional monetary policy shock among households in the presence of production-side financial frictions. A Heterogeneous Agents New Keynesian model featuring a financial accelerator is built after empirical evidence for consumption inequality. The results show that the presence of financial frictions significantly increases the magnitude of the Gini coefficient of wealth and other wealth inequality measures after contractionary monetary policy, compared to a scenario in which such frictions are inactive, proving that firms’ financial characteristics affect household wealth inequality. Consumption dynamics are also affected: financial frictions have a significant impact on how households consume and save after a monetary contraction, because they rely differently on labor income to smooth consumption. The relative increase in consumption inequality confirms the empirical results obtained in this study. |
| Keywords: | heterogeneous agents, financial frictions, monetary policy, New Keynesian models, inequalities, proxy-SVAR. |
| JEL: | C32 E12 E21 E44 E52 G51 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:mib:wpaper:538&r= |