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Financial Literacy Externalities

Author

Listed:
  • Haliassos, Michael
  • Jansson, Thomas
  • Karabulut, Yigitcan
Abstract
This paper uses unique administrative data and a quasi-field experiment of exogenous allocation in Sweden to estimate medium- and longer-run effects on financial behavior from exposure to financially literate neighbors. It contributes evidence of causal impact of exposure and of a social multiplier of financial knowledge, but also of unfavorable distributional aspects of externalities. Exposure promotes saving in private retirement accounts and stockholding, especially when neighbors have economics or business education, but only for educated households and when interaction possibilities are substantial. Findings point to transfer of knowledge rather than mere imitation or effects through labor, education, or mobility channels.

Suggested Citation

  • Haliassos, Michael & Jansson, Thomas & Karabulut, Yigitcan, 2017. "Financial Literacy Externalities," CEPR Discussion Papers 12100, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12100
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    8. Kaiser, Tim & Hamdan, Jana & Menkhoff, Lukas & Xu, Yuanwei, 2024. "Scaling up financial education: Evidence from a randomized saturation experiment," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302424, Verein für Socialpolitik / German Economic Association.
    9. Song, Yang & Wu, Weixing & Zhou, Guangsu, 2020. "Inequality of opportunity and household risky asset investment: Evidence from panel data in China," China Economic Review, Elsevier, vol. 63(C).
    10. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    11. Chen, Hailiang & Hwang, Byoung-Hyoun, 2022. "Listening in on investors’ thoughts and conversations," Journal of Financial Economics, Elsevier, vol. 145(2), pages 426-444.
    12. Hermansson, Cecilia & Jonsson, Sara & Liu, Lu, 2022. "The medium is the message: Learning channels, financial literacy, and stock market participation," International Review of Financial Analysis, Elsevier, vol. 79(C).
    13. Khurram Rehman & Md Aslam Mia, 2024. "Determinants of financial literacy: a systematic review and future research directions," Future Business Journal, Springer, vol. 10(1), pages 1-25, December.
    14. Bing Han & David Hirshleifer & Johan Walden, 2023. "Visibility Bias in the Transmission of Consumption Beliefs and Undersaving," Journal of Finance, American Finance Association, vol. 78(3), pages 1647-1704, June.
    15. Bover, Olympia & Hospido, Laura & Villanueva, Ernesto, 2018. "The Impact of High School Financial Education on Financial Knowledge and Choices: Evidence from a Randomized Trial in Spain," IZA Discussion Papers 11265, Institute of Labor Economics (IZA).
    16. Zhou, Yang & Yang, Manfang & Gan, Xu, 2023. "Education and financial literacy: Evidence from compulsory schooling law in China," The Quarterly Review of Economics and Finance, Elsevier, vol. 89(C), pages 335-346.
    17. Meister, Lorenz & Menkhoff, Lukas & Schröder, Carsten, 2024. "Work from Home, Stock Market Participation, and Inequality," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302335, Verein für Socialpolitik / German Economic Association.
    18. Sandro Ambuehl & B. Douglas Bernheim & Fulya Ersoy & Donna Harris, 2018. "Peer Advice on Financial Decisions: A case of the blind leading the blind?," NBER Working Papers 25034, National Bureau of Economic Research, Inc.
    19. Gallego-Losada, Rocío & Montero-Navarro, Antonio & Rodríguez-Sánchez, José-Luis & González-Torres, Thais, 2022. "Retirement planning and financial literacy, at the crossroads. A bibliometric analysis," Finance Research Letters, Elsevier, vol. 44(C).
    20. Altmejd, Adam & Jansson, Thomas & Karabulut, Yigitcan, 2024. "Business Education and Portfolio Returns," IZA Discussion Papers 16976, Institute of Labor Economics (IZA).
    21. Balakina, Olga & Bäckman, Claes & Parakhoniak, Anastasiia, 2024. "Beyond connectivity: Stock market participation in a network," SAFE Working Paper Series 416, Leibniz Institute for Financial Research SAFE.

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    More about this item

    Keywords

    Household finance; Financial literacy; Social interactions; Refugees;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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