Financial Education and Financial Literacy by Income and Education Groups

This study examines associations between financial education and financial literacy among people with different levels of education and income using a large, national data set, the 2015 National Financial Capability Study. This study estimates whether financial education in high school, college, or through an employer, is associated with a person's financial literacy score. Results show that people who received any financial education are likely to have higher financial literacy scores compared to those without financial education. Financial education has larger predicted probabilities for those with lower education and income, suggesting that financial education is especially important for this demographic group. This research emphasizes a need to teach financial education to people whom previous research suggests lacks financial literacy the most.

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Financial literacy and its determinants: the case of rural farm households in Ghana

Agricultural Finance Review ◽

10.1108/afr-06-2021-0078 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Martinson Ankrah Twumasi ◽

Yuansheng Jiang ◽

Salina Adhikari ◽

Caven Adu Gyamfi ◽

Isaac Asare

Keyword(s):

Developing Countries ◽

Financial Literacy ◽

Financial Education ◽

Policy Implications ◽

Farm Households ◽

Community Group ◽

Data Set ◽

Content Type ◽

Wide Range ◽

Rural Dwellers

PurposeThis paper aims to examine the determinants of rural dwellers financial literacy in Ghana.Design/methodology/approachA cross-sectional primary data set was used to estimate the factors influencing rural farm households' financial literacy using the IV-Tobit model.FindingsThe findings reveal that most rural residents are financially illiterate. The econometrics model results depicted that respondents' socioeconomic and demographic characteristics such as gender, income, age and education significantly affect financial literacy. Again, respondents who are risk seekers and listen or watch education programs are more likely to be financially literate.Research limitations/implicationsThe paper examined the determinants of rural dwellers financial literacy in four regions in Ghana. Future research should consider all or many regions for an informed generalization of findings.Practical implicationsThis paper provides evidence that rural dwellers are financially illiterate and it would require the policymakers or non-governmental organizations (NGOs) to establish a village or community group that comprises a wide range of bankers and government officials to help rural dwellers acquire some financial skills. Also, the positive relationship between media (whether respondent watches or listens to educational programs) and financial literacy implies that policymakers should focus on improving individuals' financial knowledge through training programs and utilize the media as a channel to propagate financial education to the public.Originality/valueAlthough previous studies have examined the determinants of financial literacy, little is known in developing countries and, in particular, rural communities. The authors fill this gap by contributing to the scanty existing literature in developing countries in several ways. First, this is the first study to examine the financial literacy level of rural dwellers in Ghana. Second, to not undermine the credibility of the estimation results, this study addresses the potential endogeneity issue, which other researchers have not adequately recognized. Finally, the study expands the scant literature on the subject and provides critical policy implications that will help policymakers formulate financial market policies that will contribute to rural dwellers financial literacy enhancement.

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Financial education and financial satisfaction

International Journal of Bank Marketing ◽

10.1108/ijbm-01-2016-0009 ◽

2017 ◽

Vol 35 (5) ◽

pp. 805-817 ◽

Cited By ~ 41

Author(s):

Jing Jian Xiao ◽

Nilton Porto

Keyword(s):

Financial Literacy ◽

Financial Education ◽

Well Being ◽

Financial Behavior ◽

Future Research ◽

Financial Satisfaction ◽

Financial Capability ◽

Data Set ◽

Content Type ◽

Mediating Factors

Purpose The purpose of this paper is to investigate roles of financial literacy, financial behavior, and financial capability as mediating factors between financial education and financial satisfaction. Design/methodology/approach Data are from the 2012 National Financial Capability Study, a large national data set with detailed information on financial satisfaction, education, literacy, behavior, capability, and related variables. Mediation analyses are used to answer research questions. Findings Financial education may affect financial satisfaction, a subjective measure of financial well-being, through financial literacy, financial behavior, and financial capability variables. Results show that subjective financial literacy, desirable financial behavior and a financial capability index (a sum of Z-scores of objective financial literacy, subjective financial literacy, desirable financial behavior, and perceived financial capability) are strong mediators between financial education and financial satisfaction. Research limitations/implications The study has used cross sectional data that can only document associations between financial education and satisfaction and the mediators between them. Future research could use relevant longitudinal data to verify multiple benefits of financial education. Practical implications The findings have implications for financial service professionals to take advantages of multiple benefits of financial education in content acquisition, confidence in knowledge and ability, and action taking when they communicate with their clients. Social implications Policy makers on consumer financial education may use the information to advocate and promote effective education programs to improve consumer financial well-being. Originality/value This study is the first of this kind to examine the association between financial education and financial satisfaction and several financial capability variables as mediating factors.

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Financial literacy among Malaysian Muslim undergraduates

Journal of Islamic Accounting and Business Research ◽

10.1108/jiabr-10-2017-0149 ◽

2020 ◽

Vol 11 (8) ◽

pp. 1515-1529

Author(s):

Ana Shakirah Md.Sapir @ Md.Shafik ◽

Wan Marhaini Wan Ahmad

Keyword(s):

University Students ◽

Social Environment ◽

Financial Literacy ◽

Design Methodology ◽

Financial Education ◽

Sociocultural Context ◽

Content Type ◽

Islamic Identity ◽

Literacy Scores ◽

Practical Implications

Purpose University students are known to face many challenges in achieving high financial literacy. The purpose of this paper is to examine the level of financial literacy among Malaysian Muslim undergraduates as explained through sociocultural variables. Furthermore, this paper explores a few additional Islamic measurements as part of assessing the level of financial literacy among the students. Design/methodology/approach The questionnaires were drafted based on a multi-dimensional financial literacy model and distributed conveniently to 330 respondents. Post-interviews were also conducted with selected students to further comprehend the sociocultural context. Findings The findings suggest that exposing students to financial education and practices influence their financial literacy scores. Students who attended muamalat-related courses demonstrated better financial literacy scores. Meanwhile, post-interview results indicate that the students’ social environment and interactions also play important roles in enhancing their financial literacy. Hence, it is believed that it is essential to embed Islamic-based measurements to equip students with financial literacy in tandem with their pedagogic development. The results thus extend previous studies by confirming the importance of Islamic-based finance- and business-related knowledge for all tertiary students. Furthermore, the curricula should be made compatible to their studying environment and attuned to their values and cultures. Practical implications The findings suggest the introduction of personal financial and muamalat-based knowledge and practices relative to their Islamic programme orientation. This should take place during the students’ academic years and across all academic programmes’ orientation. The study also highlights the importance of developing special measurements of Islamic financial literacy for Muslims congruent to their distinct Islamic identity. Social implications The study indicates the importance of high financial literacy among tertiary students for them to have a financially stable future. Originality/value The research is original in its use of several measurements of financial literacy that embedded Islamic teachings concomitant to the Muslim respondents.

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The Role of Financial Inclusion

Emerging Tools and Strategies for Financial Management - Advances in Finance, Accounting, and Economics ◽

10.4018/978-1-7998-2440-4.ch011 ◽

2020 ◽

pp. 248-279

Author(s):

Ulkem Basdas

Keyword(s):

Decision Making ◽

Financial Literacy ◽

Financial Education ◽

Financial Inclusion ◽

Decision Making Process ◽

Standard Definition ◽

Financial Decision Making ◽

Financial Decision ◽

Different Levels

This chapter highlights the importance of financial education, its link with financial decision-making process, comparative status of different countries, and efforts to improve current situation. Unfortunately, there is no standard definition for neither financial education nor measures to quantify it. Therefore, this chapter first aims to provide a comprehensive definition in order to explain how financial knowledge affects the decision-making process. Then, financial literacy measures from previous studies over different countries would be discussed to show financial illiteracy problem is global. Lastly, solutions and recommendations would be discussed at three different levels: younger people, individuals, and national strategies.

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Financial Education and Financial Attitudes: Evidence From a High School Experiment

Journal of Financial Counseling and Planning ◽

10.1891/jfcp-19-00034 ◽

2020 ◽

Vol 31 (2) ◽

pp. 251-266

Author(s):

Radha Bhattacharya ◽

Andrew Gill

Keyword(s):

High School ◽

High School Students ◽

Risk Taking ◽

Financial Literacy ◽

Financial Education ◽

Literacy Intervention ◽

School Students ◽

Financial Attitudes ◽

Increase Risk ◽

Per Se

We surveyed high school students in Southern California to investigate whether there is an improvement in financial attitudes from eight class periods of financial literacy intervention in a high school economics course. We examine whether the money management (MM) and financial investing (FI) components of financial instruction influence attitudes differently and whether they each influence attitudes beyond a standard economics course. We find that the MM treatment influences being thrifty and delaying gratification. Both treatments increase risk-taking behavior, with neither treatment being more important than the other. Within the confines of our experiment, exposure to economics per se did not influence any of the financial attitudes, pointing to the need for financial education to inculcate healthy financial attitudes in high school children.

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Financial Literacy and Financial Education in High School

Handbook of Consumer Finance Research ◽

10.1007/978-3-319-28887-1_11 ◽

2016 ◽

pp. 131-140 ◽

Cited By ~ 2

Author(s):

William B. Walstad ◽

Ashley Tharayil ◽

Jamie Wagner

Keyword(s):

High School ◽

Financial Literacy ◽

Financial Education

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Educação Financeira pelo mundo: Como se organizam as Estratégias Nacionais?Financial education around the world: how are national strategies organized?

Educação Matemática Pesquisa Revista do Programa de Estudos Pós-Graduados em Educação Matemática ◽

10.23925/1983-3156.2020v22i2p658-688 ◽

2020 ◽

Vol 22 (2) ◽

pp. 658-688

Author(s):

Glauciane Silva Vieira ◽

Cristiane Azêvedo Pessoa

Keyword(s):

Public Policy ◽

Financial Literacy ◽

Academic Research ◽

Financial Education ◽

Palabras Clave ◽

The World ◽

Politica Publica ◽

The Subject ◽

Government Websites ◽

Different Levels

ResumoO presente estudo tem o objetivo de explorar como diferentes países organizam seus programas e estratégias nacionais de Educação Financeira. O método utilizado foi a leitura de relatórios oficiais da OCDE e consulta a sites governamentais e pesquisas acadêmicas. Os resultados apontam que há uma tendência mundial em instituir a Educação Financeira como uma política pública nos diferentes níveis, etapas e modalidades de ensino, a fim de promover uma alfabetização financeira capaz de reeducar o comportamento dos indivíduos frente ao uso de suas finanças. Concluímos que há uma diversidade de metodologias para abordar a temática e destacamos a importância de uma Educação Financeira Escolar crítica e reflexiva.Palavras-chave: Educação financeira, Estratégias nacionais pelo mundo, Países.AbstractThis study aims to explore how different countries organize their programs and strategies to teach Financial Education. The method used was reading the official OECD reports and consulting on government websites and academic research. The results demonstrate a worldwide willingness to institute Financial Education as public policy at different levels, stages, and modalities of education. The main purpose of these countries is to build financial literacy capable of re-educating the behavior of individuals in relation to their finances. We concluded that there is a great diversity of methods to approach the subject, and we highlight the importance of a critic and reflective School Financial Education.Keywords: Financial education, National strategies around the world, Countries.ResumenEste estudio tiene como objetivo explorar cómo diferentes países organizan sus programas y estrategias para enseñar Educación Financiera. El método utilizado fue la lectura de los informes oficiales de la OCDE y la consulta en sitios web gubernamentales e investigaciones académicas. Los resultados demuestran la voluntad mundial de instituir la Educación Financiera como política pública en diferentes niveles, etapas y modalidades de educación. El objetivo principal de estos países es construir una educación financiera capaz de reeducar el comportamiento de las personas en relación con sus finanzas. Concluimos que existe una gran diversidad de métodos para abordar el tema, y destacamos la importancia de una Educación Financiera Escolar crítica y reflexiva. Palabras clave: Educación financiera; Estrategias nacionales por el mundo; Países.

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Financial literacy, institutions and education: Lessons from the German reunification

German Economic Review ◽

10.1515/ger-2020-0027 ◽

2021 ◽

Vol 0 (0) ◽

Author(s):

Maddalena Davoli ◽

Jia Hou

Keyword(s):

Educational System ◽

Financial Literacy ◽

East Germany ◽

Control Group ◽

German Reunification ◽

Set Up ◽

Literacy Scores ◽

The Cold War ◽

Different Levels ◽

Specific Determinant

Abstract A growing body of literature highlights the importance of financial literacy in affecting household choices. However, much fewer studies focus on understanding the determinants of different levels of financial literacy. Our paper contributes to filling this gap by analyzing a specific determinant, i. e., the educational system, to explain the heterogeneity of financial literacy scores across Germany. The results suggest that the lower financial literacy observed in East Germany can be partially attributed to the different institutional framework experienced during the Cold War, more specifically, to the socialist educational system experienced in East Germany, which affected specific cohorts of individuals. By exploiting the unique set-up of the German reunification, we identify education as a channel through which institutions and financial literacy are related in the German context. In support of this hypothesis, we find that individuals exposed to the Eastern educational system exhibit 12 % 12\hspace{0.1667em}\% to 21 % 21\hspace{0.1667em}\% lower financial literacy scores compared with the households in the control group, not exposed to such system.

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The Role of Financial Inclusion

Research Anthology on Personal Finance and Improving Financial Literacy ◽

10.4018/978-1-7998-8049-3.ch021 ◽

2021 ◽

pp. 374-398

Author(s):

Ulkem Basdas

Keyword(s):

Decision Making ◽

Financial Literacy ◽

Financial Education ◽

Financial Inclusion ◽

Decision Making Process ◽

Standard Definition ◽

Financial Decision Making ◽

Financial Decision ◽

Different Levels

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Financial literacy among high school students: Evidence from India

Citizenship Social and Economics Education ◽

10.1177/2047173418809712 ◽

2018 ◽

Vol 17 (3) ◽

pp. 168-187

Author(s):

J.D Jayaraman ◽

Saigeetha Jambunathan

Keyword(s):

High School ◽

High School Students ◽

Financial Literacy ◽

Financial Education ◽

Developed Countries ◽

School Students ◽

Correct Score ◽

Hands On ◽

Macroeconomic Impact ◽

Low Levels

Financial literacy is an important but oft ignored skill that is vital for young people. This study measured financial literacy levels among high school students ( N = 608) in India and found low levels of performance on standard measures of financial literacy. The percentage correct score on the basic financial literacy questions was 45% and on the sophisticated financial literacy questions the score was 44%. Financial literacy levels in India were found to be lower than those in developed countries. Gender differences were found, with females outperforming males, contrary to findings in developed countries. Students who pursued the commerce/economics stream of education were found to have higher levels of financial literacy than students pursuing the science stream. Results showed that students, despite having high levels of numeracy, were unable to transfer that knowledge to do financial computations. Parental involvement was also found to have a significant influence on financial literacy. Interviews with students highlighted the fact that understanding of societal and macroeconomic impacts of financial literacy was low. These findings lend support for high school financial education which involves parents and stresses practical hands-on application, societal and macroeconomic impact, as a means of improving financial literacy.

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