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Adult financial literacy and households' financial assets: the role of bank information policies

Fort, M; Manaresi, F; Trucchi, S; (2016) Adult financial literacy and households' financial assets: the role of bank information policies. Economic Policy , 31 (88) pp. 743-782. 10.1093/epolic/eiw012. Green open access

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Abstract

We investigate the role of bank information policies in fostering the accumulation of financial knowledge. Exploiting the exogenous variability induced by the presence of a consortium of banks in Italy (PattiChiari), we find that these policies are effective for a small subsample of the population (5–10%) and lead to an increase in financial literacy by about 10%, on average. Compliance is highest among low-educated respondents older than 60 years. We use these policies as an instrumental variable to estimate the effect of financial literacy on financial assets. We find that one standard deviation increase in financial literacy determines an increase in household financial assets by 35% of a standard deviation (8,000 euros). Effects are heterogeneous in the population and highest among elderly low-educated households.

Type: Article
Title: Adult financial literacy and households' financial assets: the role of bank information policies
Open access status: An open access version is available from UCL Discovery
DOI: 10.1093/epolic/eiw012
Publisher version: http://dx.doi.org/10.1093/epolic/eiw012
Language: English
Additional information: Copyright © CEPR, CESifo, Sciences Po, 2016.This is a pre-copyedited, author-produced version of an article accepted for publication in Economic Policy following peer review. The version of record [Fort, M; Manaresi, F; Trucchi, S; (2016) Adult financial literacy and households' financial assets: the role of bank information policies. Economic Policy, 31 (88) pp. 743-782. 10.1093/epolic/eiw012] is available online at: http://dx.doi.org/10.1093/epolic/eiw012
Keywords: Social Sciences, Economics, Business & Economics, D14, G11, bank information policies, financial assets, financial literacy, instrumental variables, Education, Identification, Decisions, Demand, Wealth
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
URI: https://discovery.ucl.ac.uk/id/eprint/1530877
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