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This paper documents how extensive economic education can reduce the risk of getting into financial trouble by comparing people who enter business and economics programs with people who enter other higher education programs. To identify the causal effect, I exploit GPA admission thresholds that quasi-randomize applicants near the thresholds into different higher education programs. I find that admission to an economics program reduces the probability of loan default and delinquency by one half. This large reduction is associated with changes in financial behavior, but it is not associated with differences in the level or stability of people's income. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine and compare the associations between financial capability and financial anxiety (FA) before and during the coronavirus disease 2019 (COVID-19) pandemic. Specifically, financial capability is measured by three indicators: financial knowledge, financial behavior and financial confidence. This study also examines and compares the association among different income groups before and during the pandemic. Design/methodology/approach: Data are from 2018 to 2021 National Financial Capability Study (NFCS). Structural equation modeling (SEM) is employed to examine the direct and indirect associations between financial capability factors and FA. Furthermore, this paper also conducts multi-group SEM for three income groups to examine the heterogeneous effects of household income. Findings: Both before and during the pandemic, financial knowledge is directly positively and financial behavior is directly negatively associated with FA. In addition, both financial knowledge and financial behavior are positively associated with financial confidence, which in turn is negatively associated with FA. However, when taking the indirect effects into consideration, the total effects of financial capability factors on FA are all negative. Furthermore, the pandemic has intensified the negative association between financial behavior and FA rather than financial knowledge or financial confidence. Multi-group SEM shows that the positive direct effects of financial knowledge are only significant in the low-income group, while the negative direct effects of financial behavior are only significant in the low- and middle-income groups before the pandemic. However, direct effects of financial knowledge and financial behavior are significant in all income groups during the pandemic. Originality/value: First, this study specifies a construct, financial confidence, to proxy perceived financial capability. Second, it examines the mediating role of financial confidence in the association between the other two financial capability factors (financial knowledge and financial behaviors) and FA. Third, it also compares the associations between financial capability factors and FA before and during the COVID-19 pandemic. [ABSTRACT FROM AUTHOR]

The decrease in companies going public has received widespread attention, and the associated costs are widely debated. We document that high local initial public offering (IPO) activity leads to increases in stock market participation of 5–6 percent. This is striking, given that such participation represents a key factor toward building wealth. Local IPOs increase both households' propensity to own stock and their percent equity holdings. The attention channel drives effects: local IPOs attract attention to the market, through increased information production and publicity. The wealth channel has little influence, consistent with local IPOs not generating wealth shocks for most households. [ABSTRACT FROM AUTHOR]

This study explores financial literacy (FL) and its influence on market participation among rural residents in China. Using the 2017 China Household Finance Survey, we find that rural residents have low FL and answer only 33% of basic and 20.8% of advanced questions on average. The findings indicate a substantial disparity in their FL skills. The ordinary least squares regression results reveal that advanced FL is statistically positively related to market participation. To mitigate endogeneity concerns, we adopt the instrument variable estimator within the generalized method of moment (IV-GMM). The IV-GMM results indicate that FL positively affects the market participation of Chinese rural households. The probability of market participation increases by over 7% with every unit increase in advanced FL scores. Additionally, the robustness tests confirm the positive correlation between advanced FL and market participation. Furthermore, the impact of FL on stock-market participation is more pronounced among rural residents in economically developed regions and those with greater financial assets.

AbstractWe examine the impacts of financial technology and financial literacy on the development of financial inclusion among the younger generation using data from a survey with 1288 students in Vietnam in the city and rural areas. We employ logistic regression and two-stage instrumental variable regression for our analysis, with location and financial shock caused by COVID-19 serving as the instruments. Vietnam is a fintech hub in Asia with the world-leading adaption of cryptocurrency and a significantly high rate of e-wallet use. The results indicate although there is a gap in access to financial services between urban and rural areas, the access rate is considerably high. Fintech and financial literacy play a significant role in facilitating this high level of financial inclusion development. Women have better access to financial services, showing the effectiveness of women’s empowerment programs. Little evidence shows the negative impact of the pandemic on financial inclusion. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to analyse how financial literacy (FL) is conceptualised and operationalised in the Indian context. Design/methodology/approach: A systematic literature review (SLR) was conducted using the Preferred Reporting Items for Systematic Reviews and Meta-analyses (PRISMA) protocol. Thirty-six articles published between 2010 and 2020 were considered for analysis. The FL conceptualisation was examined based on knowledge, ability, skill, attitude and confidence elements. The FL operationalisation was analysed using the modified version of the Organisation for Economic Co-operation and Development's (OECD) Programme for International Student Assessment (PISA) 2012 model for organising the domain for an assessment framework. Findings: The findings indicate that, despite offering operationalisation details of the FL, 13 out of 36 studies did not include a conceptual definition of FL. Of the 23 studies that mentioned a conceptual definition, 87% are primarily focused on the "knowledge" element and only 39% have combined knowledge, ability/skill and attitude elements in defining FL. As in the developed countries, the Indian studies also preferred investment/saving-related contents in their FL measures. The volume of content focusing on the financial landscape is meagre amongst the FL measures used in India and developed countries. The survey instruments of most studies have been designed in the individuals' context but have failed to measure the extent to which individuals apply the knowledge in performing their day-to-day financial transactions. Further, it was found that 20 out of 36 studies did not convert the FL level of their target groups into a single indicator or operational value. Originality/value: To the best of our knowledge, this is the first study that explores the FL's assessment practices in India. Further, this study offers new insights by comparing the contents of FL measures used in Indian studies with those used in developed countries. [ABSTRACT FROM AUTHOR]

Despite questions surrounding their reliability, much of the financial literacy literature continues to rely on simple metrics – without checking whether using an alternative might yield different findings. The present paper does just that: we replicate two prior studies and substitute the Standard & Poor’s indicator originally used with the Big Three and OECD/INFE metrics. The results are disconcerting. In the first study, many of the relationships between national culture and country-level financial literacy become weakly significant or disappear altogether. The second study is also of a cross-country nature but analyses the impact of financial literacy on financial inclusion. Here, the magnitude of the coefficient on financial literacy in the OLS regressions decreases substantially once we use alternative metrics. In one case, the coefficient drops by no less than 69 per cent with the OECD/INFE metric, and by between one-third and half with the Big Three. Even more concerning, the Instrumental Variable regressions show no causal relationship anymore. These findings are a strong signal that the literature would benefit from revisiting several key papers, especially those relying on cross-country data.

This paper studies the relationship between risk propensity, education and financial literacy. The results of the empirical investigation confirm the importance of the key explanatory variables of education and financial competence. Since they are both included in the model, the different roles of each are singled out. In particular, while education turns out to be a factor contributing to raising risk tolerance, financial literacy tends to reduce risk propensity. Risk attitude is evaluated by self-reported assessment and modeled through cumulative logit models. In order to handle anomalous data, M estimators with a bounded influence function are considered.

Retirement planning is viewed as one of the cornerstones of long-term household financial security. The responsibility of retirement planning has now been shifted to the individual and is no longer the responsibility of the employer.

Purpose: This study analyses the role of individuals' objective financial knowledge in shaping preferences for ethical intermediaries and sustainable investments in Italy. Another goal of this study is to assess the impact of individuals' misperceptions about their own financial knowledge and to test for gender-related differences in attitudes towards socially responsible investing (SRI). Design/methodology/approach: Using nationally representative microdata from the Bank of Italy's "Italian Literacy and Financial Competence Survey" (IACOFI), the authors use probit models, extended to account for potential endogeneity issues, to assess the causal effects of financial knowledge and confidence on stated preferences for SRI. Empirical models also allow to explicitly assess the moderating role of gender on the effects of financial knowledge and confidence on attitudes towards sustainable investing. Findings: Results indicate that individuals' preferences for sustainable finance significantly increase with financial knowledge, suggesting that inadequate financial competencies represent a barrier to participation in SRI. At the same time, lack of confidence in one's own financial knowledge significantly hampers attitudes towards sustainable investments. Furthermore, the authors show that women have a greater preference for sustainable finance than men and point out that financial knowledge and confidence exert heterogenous effects on attitudes towards SRI. Originality/value: This study provides several contributions to the literature on SRI. First, the authors give evidence of the causal effect of financial knowledge on preferences for both ethical financial intermediaries and sustainable investments. Moreover, this is the first study to investigate the role of financial underconfidence bias in shaping individuals' SRI attitudes. Finally, extending previous research, the authors assess differences in SRI preferences between women and men and provide novel evidence on gender-related heterogeneity in the effects of financial knowledge and underconfidence. [ABSTRACT FROM AUTHOR]

The study analyzes and assesses the economic and linguistic complexity of individual retirement products in Poland. For this purpose, an original multidimensional approach was used and various research methods were applied. We analyzed 75 out of 86 individual pension products (IKEs and IKZEs) offered in Poland in the first half of 2017, covering our analysis of nearly 90% of Poland’s market of individual pension products. We performed the nonparametric Spearman’s rank correlation analysis, we used hierarchical cluster analysis, analysis of variance, and a chi-square test to verify if there was a statistical relationship between the clusters and the type of financial provider and the type of individual pension product (IKE or IKZE). We also built also a map of the products that shows their economic and linguistic complexity. We find that high-fee products tend to have the most complex fee systems, suggesting that the complex fee system may be a strategy used by the providers of individual retirement products. Our results also indicate that individual retirement products are too complex for most individuals.

This study aims to create a theoretical model of business sustainability with financial literacy antecedents. The antecedents of financial literacy are intellectual capital and risk attitudes. The research location is in the province of East Java, Indonesia. Batik SMEs are only found in Indonesia because it is a cultural heritage belonging to Indonesia that does not exist in other countries. The sampling technique used was purposive sampling, with 222 respondents from the batik SMEs spread across six cities. The data was taken using a questionnaire on a Likert scale. Data analysis uses SEM (structural equation modeling) with the SmartPLS application. The study results show that risk attitudes toward financial literacy have a positive effect. The effect of financial literacy on the business sustainability of the batik industry has a positive influence. The impact of intellectual capital on the business sustainability of the batik industry has a positive effect. Risk attitudes have no significant positive impact on business sustainability. Financial literacy has yet to be able to mediate intellectual capital’s influence on the batik SME’s business sustainability. This needs to be explored further with further research. Furthermore, financial literacy can mediate risk attitudes towards the business sustainability of batik SMEs.

One of the financially vulnerable groups is older people, who receive little attention in the financial inclusion literature. The elderly is financially excluded in Thailand, an emerging economy with high financial inclusion and rapid aging of the population. Using the Findex survey data 2017, we construct financial inclusion (FI) scores with five measures and explore the influence of aging, mobile phones, and mobile money, controlling for individual characteristics. Among non-account holders, more than half are older than 55 years old. A significantly negative association between FI and age/age group is confirmed. We also prove the positive effect of mobile phones and mobile money on FI scores, by 0.48–0.49 percentage points. This study sheds light on the drivers of mobile banking among the elderly with Thai ICT data, showing that low internet access and mobile phone use are the biggest barriers to financial inclusion. No gender disparity in FI is found.

The issue of culture is becoming ever more interesting, especially when interconnected with other business factors like finance. Although intriguing, the relationship between culture and finance has long been neglected. Unlike existing research, this article aims at assessing the impact of culture on financial inclusion and financial literacy among Cameroonian small business managers. In this quantitative investigation, the indices are built using Principal Component Analysis (PCA), and the estimation is done using Ordinary Least Squares (OLS). The data used is from a research survey on 161 small enterprises in the cities of Douala, Bafoussam, Foumban, Foumbot, and Dschang. The findings demonstrate that organizational culture, in contrast to its social component, is positively and strongly associated with financial literacy and financial inclusion. Additionally, firm and manager variables like age, turnover variation, and education level significantly explain these financial variables. Thus, it is essential to promote organizational culture in Cameroonian businesses.

Purpose: Despite a lot of developments in the financial markets, financial illiteracy is a main concern across the world and is directly associated with faulty financial decisions making. The situation is very alarming among a socially or economically marginalized section of society as they cannot afford to pay finance professionals for their wealth management. The objective of the study is to understand the level of financial literacy as well as its determinants among the marginalized section of society living in hilly areas. Design/methodology/approach: The study is descriptive as well as empirical in design and based on primary data collected from the 300 scheduled tribe households of Himachal Pradesh a hilly state of India. Findings: The study observed that financial literacy is very low among the scheduled tribes living, and their level of education, income, family system and Internet accessibility have a significant impact on their financial scores. Practical implications: The outcome of the paper may be useful to design customized awareness programs, and financial products focusing on scheduled tribes living in far-flung areas so that they can get the benefits of market-driven financial products. Social implications: Financial awareness can help scheduled tribes in their financial inclusion thereby reducing poverty and inequality through informed financial decisions. Thus, the outcome if implemented can help in achieving the objective of inclusive growth. Originality/value: No specific work has been done to explore the level as well as the determinants of financial literacy among the scheduled tribe households living in hill areas. This paper will fill this gap and contributes to the existing work on financial literacy and inclusion. Peer review: The peer-review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2023-0008 [ABSTRACT FROM AUTHOR]

We administered the FINRA Foundation's National Financial Capability Study questionnaire to members of the RAND American Life Panel in 2012 and 2018. Using this unique, longitudinal data set, we investigate the evolution of financial literacy over time and shed light on the effect of financial knowledge on financial outcomes. Over a six-year observation period, financial literacy appears to be rather stable, with a slight tendency to decline at older ages. Importantly, financial literacy has significant predictive power for future financial outcomes, even after controlling for baseline outcomes and a wide set of demographics and individual characteristics that influence financial decision making. [ABSTRACT FROM AUTHOR]

Research purpose. The main goal of the article is to determine the current level of financial literacy among clients of the selected bank in Slovakia. This finding will be compared with the average level in the country. In the survey, we focused on determining their financial literacy level. Currently, a lot of attention is paid to the issue of financial literacy. In connection with financial literacy, a lot is said about education. Therefore, in the paper, we focused on finding out the relationship between financial literacy and the level of education as such. We also compared the financial literacy of the survey sample with the overall financial literacy in Slovakia.

This paper examines the effect of financial literacy level on cash holdings in Turkey. Utilizing the Methods of Payment Survey, which includes both financial literacy and cash-related data, we first investigate the fundamentals of financial literacy in Turkey. Based on the performance on financial literacy questions, we categorize respondents into three groups. Subsequently, we analyze how cash holding behavior differs among financial literacy groups. Our results reveal that financially literate respondents tend to hold less cash on hand and store more cash elsewhere. Moreover, card ownership increases through financial literacy and the change in payment behavior of financially literate respondents is more significant during Covid-19 pandemic. The results imply that promoting financial literacy may result in less cash usage at points of sale accompanied by the currency in circulation growth, due to the overwhelming effect of increased non-transactional demand following a positive change in financial literacy level.