Is More Financial Literacy Always Beneficial? An Investigation through a Mediator (original) (raw)

Financial Literacy, Education, and Advice

2014

The facts presented in this study and the observations and viewpoints expressed are the sole responsibility of the authors. They do not necessarily represent positions of the W.E. Upjohn Institute for Employment Research.

What do we know about financial literacy? A Literature review

This article provides a literature review about the dilemma of financial literacy. The individuals and families’ financial decision process is getting more vital in recent years. Given the increasingly risky and globalized markets, the actual context of global financial crisis and the continuous increasing in the complexity of financial products and services, individuals must be able to make well-informed and correct decisions. Consequently, higher levels of financial knowledge contribute to more extensive economic growth and development. However, it has been shown that, in global terms, the financial literacy present low values, which suggest the need of financial educational programs in the schools curricula. There is also evidence of a positive relationship between financial literacy and investment decisions, as well as retirement programs. Studies conducted to date suggest that there are socioeconomic conditions that influence the financial knowledge, attitudes and behaviours, s...

The Role of Financial Literacy on Financial Behavior

JABE (JOURNAL OF ACCOUNTING AND BUSINESS EDUCATION)

A number of previous empirical studies found that, financially speaking, literate people tends to do budgeting, saving, controlling expenses, managing debt well, participating in stock market and planning pension fund, etc. In other words, the higher an individual’s knowledge and understanding of financial concept, the more likely they are to behave financially well in their daily life. Financial literacy is needed by everyone, including womenpreneur because not only they have to be able to manage their personal finance, they should also manage their business finance. Financially literate people are more likely to get access to external funding and to develop their business. This research aims to examine the role played by financial literacy on financial behavior of womenpreneur in Malang. Financial literacy was measured using 11 questions modified from Lusardi & Mitchell (2011) and financial behavior was measured using 8 questions taken from INFE. The sample was 95 respondents who ...

Financial Literacy and Economic Outcomes: Evidence and Policy Implications

SSRN Electronic Journal, 2015

This paper reviews what we have learned over the past decade about financial literacy and its relationship to financial decision-making around the world. Using three questions, we have surveyed people in several countries to determine whether they have the fundamental knowledge of economics and finance needed to function as effective decision-makers. We find that levels of financial literacy are low not only in the United States but also in many other countries including those with well-developed financial markets. Moreover, financial illiteracy is particularly acute for some demographic groups, especially women and the less-educated. These findings are important since financial literacy is linked to borrowing, saving, and spending patterns. We also offer new evidence on financial literacy among high school students drawing on the 2012 Programme for International Student Assessment implemented in 18 countries. Last, we discuss the implications of this research for policy.

FINANCIAL EDUCATION OVER FINANCIAL LITERACY: ITS DETERMINANTS AND MEASURES

AMITESH PUBLISHER & COMPANY, 2024

To identify the association among financial education and Financial Literacy, Financial education initiatives generally produce a constructive behavioral impact on financial knowledge and subsequent behaviors. The results are of significant economic importance, identical to those seen in the mediation of education in other areas, Financial Literacy is a blend of Knowledge, Behaviour, and Attitude.

The Economic Importance of Financial Literacy: Theory and Evidence †

Journal of Economic Literature, 2014

This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research, which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare, as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy. (J...

Financial Literacy – What and Why Should We Improve

EURASIAN JOURNAL OF SOCIAL SCIENCES, 2019

Financial literacy has become a necessary skill for life and employment. This paper aims to introduce the research findings from a survey conducted in higher education institutions. 522 students participated in the poll. The main goal of this study was to analyze the financial literacy of students in Estonia. The standardized survey method of data collection was used and logit regression model was chosen to examine the impact of financial and non-financial variables on the financial literacy of respondents. The survey revealed that financial literacy of students is affected by gender, nationality, age and academic discipline. However, the level of education the students pursue, the work experience of the students and the level of education of the parents does not affect the level of financial literacy. The main conclusions of this study were that students' financial literacy level in Estonia was low and students' interest for long-term planning was not very high. 51% of the respondents had low level of financial literacy, only 3.4% plan their financial affairs in advance on a several years basis and 55.9% have considered retirement funding. These results have important implication for policy makers and further researchers to develop better strategies for financial education.

The antecedents and consequences of financial literacy: a meta-analysis

International Journal of Bank Marketing

Purpose The purpose of this paper is to determine the antecedents and consequences of financial literacy by using meta-analytic techniques. Design/methodology/approach The authors conducted a meta-analysis of 44 valid studies, which generated a total of 690 observations (effect sizes). Findings The findings showed that the factors influencing financial literacy were as follows: educational level, financial attitude, financial knowledge, financial behaviour, gender, household income and investments. The consequences of financial literacy were the behaviour of incurring avoidable credit and checking fees, credit score, and the willingness to take investment risks. The authors also find some methodological, cultural, economic and theoretical moderations effects between financial literacy and antecedent/consequent constructs. Research limitations/implications This meta-analysis reviewed the relationships found worldwide in the literature on financial literacy. The authors also identifie...

Extending the concept of financial literacy: A step toward a sustainable society

Heritage and Sustainable Development

This study analyzes financial literacy in Bosnia and Herzegovina by considering three areas: interest, inflation, and diversification, with financial literacy as a multi-dimensional construct consisting of financial knowledge and financial skills. Using a cross-sectional questionnaire-based survey, 638 valid responses were collected from working-age individuals (18-65 years old). Financial knowledge and skills were analyzed through a prism of several demographic factors, including age, education, household income, and gender. Welch's F tests, ANOVA with Brown-Forsythe, LSD post hoc tests, and Welch's t-tests were performed to test the hypotheses. The findings provide evidence of moderate financial literacy. Similarly to previous studies, financial knowledge and skills partially depend on the respondent's age, education, household income, and gender. The study contributes to the current literature by taking a much-needed non-functional approach to examining financial lite...