Financial Literacy Performance Research Articles

Breaking the cycle: The mediating effects of reading, mathematical and ICT literacy skills on financial success in youth

AbstractFor young people, financial literacy is important because they face financial decisions that can have significant consequences throughout their lives, such as investing in a college education or a business, shopping, buying books or computer games. Therefore, this study examined the relationship between the financial literacy levels of young people and their perceived ICT competence, reading and mathematical literacy, which are measurable and observable phenomena. The research data were obtained from the 2018 PISA (Program for International Student Assessment) database, officially published by the OECD. The participants of this study were 15‐year‐old students from 15 different countries that participated in the PISA programme in 2018. Mathematical and reading literacy were found to be an important variable affecting the financial literacy performance of young people. However, ICT competencies did not significantly affect the financial literacy performance of young people. Additionally, this study tested the mediating effects of reading literacy, mathematical literacy and perceived ICT competence variables on financial literacy.

Sludged! Can financial literacy shield against price manipulation at the shops?

AbstractRetailers lure consumers with clever use of choice architecture; examples include “bargains” heavily restricted in the fine print and discounts structured to exaggerate the true saving. Given that financial literacy is a key competency for managing money, good financial literacy may provide protection from these “sludges.” In an exploratory experiment, we measure 48 university students' retail literacy and financial literacy, while concurrently tracking their emotional reactions and decision time using FaceReader software. We then test hypotheses on a larger sample using an online survey. We find that strong financial literacy supports retail literacy and vice versa, but the two constructs are distinct. The differences are identified through mathematical and methodological reasoning, gender, and emotion. While gender remains a factor for financial literacy, it is less prominent in retail literacy, and women respond more positively to retail literacy performance measurement. We recommend future investigation into building women's financial literacy performance using materials that are aesthetically pleasing and based on familiar financial frames and scenarios.

DO ECONOMIC FACTORS AND FINANCIAL BEHAVIOUR INFLUENCE FINANCIAL LITERACY PERFORMANCE AMONG RURAL WOMEN IN UGANDA?

Background: Lack of economic opportunities and good financial behaviour among women in rural areas are still far-reaching problems. Financial literacy performance has become more critical in supporting women empowerment especially in rural areas. Methodology: This study investigates how economic factors and financial behaviour influence financial literacy performance among rural women in Uganda: a case study of Luweero district. Using a multi-stage sampling strategy with a cross-sectional quantitative research design, a sample of 150 rural women subsistence farmers who are also operating small businesses was selected. Multiple linear regression models were used to predict on average the expected financial literacy performances among rural women. Results: Among the economic factors, on average women who were educated, own businesses and had ever received financial literacy training, and belonged to a village savings and loan association were expected to have financial literacy performance of 6.67 (pvalue=0.024,CI=0.89-12.45), 9.83 (p-value=0.031, CI=0.92-18.72), and 6.56 (p-value=0.05, CI= -0.01-13.13) more than those that were uneducated, had no business and had never received any form of financial literacy training, and belonged to no village savings and loan association respectively. Among the financial behaviour factors, on average women who were neither economical nor spending oriented, who had maintained minimal financial records, planned and implemented a regular savings programme were expected to have financial literacy performanceof 10.34 (p-value=0.037, CI=0.63-20.05),7.05(p-value=0.033, CI=0.57-13.53) and 13.04 (pvalue=0.000, CI=6.00-20.07) more than those who were very economical, never maintained any financial records, and did not plan and implement a regular savings programme respectively. Conclusions and recommendations: The findings demonstrate how economic and financial behaviour factors influence financial literacy performance among rural women in Uganda. Financial education; sensitization on the relevance of village savings and loan associations (VSLA); having a saving plan contribute to the economic and social empowerment of rural women.

The role of learning motivation on financial knowledge among Vietnamese college students

AbstractUsing survey data from 730 undergraduates in Vietnam, we find that learning motivation and its components, especially self‐efficacy, finance learning value, and achievement goals, significantly correlate with students' financial literacy performance. In addition, these correlations are moderated by student characteristics, among which academic seniority, university type, parents' education, and extra math study during high school matter the most. Our results raise significant implications to policymakers, researchers, and educators that include understanding the role of motivation and incorporating it in financial literacy education and intervention programs and considering the moderation roles that individuals' characteristics play in the motivation‐financial literacy link. We encourage more research in these areas.

Secondary teachers’ experiences of enacting financial literacy/accounting in a technology-rich environment

ABSTRACT South African accounting and Economic and Management Sciences (EMS) teachers draw from different levels of experience in the teaching of financial literacy. This leads to poor performance in financial literacy and accounting in the FET phase. Therefore, this qualitative study sought to explore the secondary teachers’ experiences of enacting financial literacy/accounting in a technology-rich environment. The interpretive paradigm is used as a world view in the presentation of findings framed by the TPACK theoretical framework. One-on-one semi-structured interviews, focus groups and reflective activities were used to generate data from the six teachers in distinct schools who were purposefully and conveniently selected. Data were thematically analysed through inductive and deductive processes. Findings revealed that the varying use of experiences reflects the lack of content knowledge, technological knowledge which affects the pedagogical knowledge and some of the curriculum concepts. The study recommends the combination of proficient (professional) and common (societal) experiences so that subjective (personal) experiences assist teachers in enacting and integrating technologies with the financial literacy/accounting curriculum in a way that improves learner performance in a technology-rich environment

Financial literacy, value creation and firm performance. An investigation of Italian small and medium enterprises

Financial literacy, value creation and firm performance. An investigation of Italian small and medium enterprises

Predictors of Russian Students’ Financial Literacy: The PISA 2018 Results

Based on the OECD PISA financial literacy data released in 2020, Russian students’ strengths and deficits are analyzed to examine the relationship between financial literacy and a variety of factors. Regression analysis shows that both individual and school-related characteristics are significant predictors of students’ performance in financial literacy. In particular, when controlling for socioeconomic status (SES), non-cognitive factors, and school climate, 15-year-old girls score lower on financial literacy than boys of the same age (b = –7.04, p < .05). Family SES is positively associated with financial literacy scores (b = 15.24, p < .01), and school SES demonstrates an even stronger association (b = 35.78, p < .01). Among non-cognitive factors, interest in money matters (categorical variable) and confidence in dealing with money matters (b = 7.95, p < .01) play a significant role. Teacher behavior hindering learning has a negative effect on financial literacy (b = –4.72, p < .05). The findings are used to develop practical recommendations for promoting financial literacy, addressed to both teachers and parents.

DEVELOPING AND VALIDATING THE MEASUREMENT MODEL FOR FINANCIAL LITERACY CONSTRUCT USING CONFIRMATORY FACTOR ANALYSIS

Purpose of the study: This study aims to develop and validate the instruments measuring financial Literacy construct.
 Methodology: The pilot study randomly sampled some 100 school-teachers using a self-administered questionnaire. The Exploratory Factor Analysis (EFA) procedure has explored the usefulness of measuring items and determined the dimensionality of the construct. Finally, using the newly developed instruments, the field study obtained a random sample of 300 school-teachers to survey using a self-administered questionnaire. The data from the field were used to validate the instruments through the Confirmatory Factor Analysis (CFA) procedure.
 Main Findings: The EFA procedure found three components that emerged from the items. The CFA procedure validated the instruments measuring Financial Literacy construct for uni-dimensionality, validity, and reliability.
 Applications of this study: The result showed that the measurement model of the Financial Literacy construct achieved the requirement for construct validity and reliability and should be able to be used in the future of research.
 Novelty/Originality of this study: This study produced instruments to assess Financial Literacy performance specifically among school teachers in Malaysia. School teachers consist of the highest number of employees in the country besides their nature of works and job characteristics differ from another group of employees.

Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters

This paper focused on the family as context for financial socialization and students' experiences with money matters to explain the acquisition of financial knowledge of young people in fifteen OECD countries and economies. We used data from the second OECD PISA financial literacy assessment in 2015. Multilevel regressions of students' performance in financial literacy were presented. When explaining financial literacy differences across countries a significant predictor of financial literacy was a well-functioning educational system proxied in our study by the quality of its mathematical and scientific education. After accounting for performance in mathematics and reading and other variables, estimates of multilevel regressions by country showed that students' financial literacy was associated mainly with understanding the value of saving and discussing money matters with parents. In some countries, exposure to (and the use of) financial products – in particular, holding a bank account – improved students' financial knowledge as well.

Financial literacy and business performances improvement of micro, small, medium-sized enterprises in East Java Province, Indonesia

The primary purpose of this study is to examine the relationship between financial literacy and business performance improvement of MSMEs in East Java Province. Data collection from a survey questionnaire of 399 respondents was used to examine the research model. Then, the research model was analysed primarily using logistic regression supported by SPSS V.20 Software. The results of the study show that bookkeeping literacy and budgeting literacy has been proven as the significant predictor of sales growth, profit growth and overall business performance of MSMEs. However, control variables such as gender, education, and experience do not give any critical role in the relationship between financial literacy and business performance improvement of MSMEs. Theoretically, this study proposed that increasing the level of financial literacy for MSMEs managers related to bookkeeping and budgeting skills can enhance the business performance of MSMEs. Practically, the results of the study can be used as a reference for increasing the level of financial literacy for MSMEs managers who are still low in Indonesia. It is suggested to develop well-structured regular training for MSMEs managers regarding bookkeeping and budgeting skills in improving the level of financial literacy and business performance simultaneously.

Woman Entrepreneurs and Financial Literacy: A Study in Selected Districts of Western Odisha

The level of financial literacy among the Indian women has not been well documented. Hence, the need arises to understand in detail the issue of financial literacy among women in India. This paper is an attempt in this direction. Financial literacy has been identified as one of the key competencies required for establishing, managing and thriving of the enterprise. However, the exact effect they have on the financial performance of enterprise has not been fully established by the available literature, therefore the need for further research in this area. This study seeks to establish the influence of financial literacy on the financial performance of women entrepreneurs in selected districts of western Odisha. A descriptive survey design was adopted for conducting the study. A sample of 57 woman entrepreneurs was selected out of the total population, using stratified sampling methods. The data collected was analysed using SPSS and the significance of the results tested using inferential statistics. The results of the multiple regressions revealed that there is a significant strong positive relationship between financial literacy and financial performance of woman entrepreneurs. The study recommends that awareness be created among woman entrepreneurs about the importance of being financially literate by encouraging them to participate in financial literacy training programmes.

Can problem-solving attitudes explain the gender gap in financial literacy? Evidence from Italian students’ data

Recent results from the OECD PISA (Financial literacy assessment framework. Australian Council for Educational Research. ACER, Australia, 2012) highlight that Italy is the only surveyed country where, among 15-year-old students, boys perform significantly better than girls in terms of financial literacy. This gap is relevant because financially literacy is crucial to make sound financial decisions and, consequently, it is likely to impact strongly on well-being of women. The main findings reveal that students’ performance in financial literacy is most strongly influenced by some personality traits, such as perseverance and openness to solving complex problems, and, at same time, by the school career and the type of school attended. Their effects are larger among low-performing students than in the upper tail of the score distribution. A decomposition exercise of the gender gap in financial literacy confirms the role played by motivational and attitudinal factors and, at the same time, highlights that putting males and females on an even footing with respect to personal characteristics does not suffice to close the gap.

Personal Financial Literacy Among U.S. Medical Students

This article was migrated. The article was not marked as recommended. Background: Personal financial literacy is associated with successfully managing debt, investing for retirement, and coping with financial strain. Though medical students occupy a financially unique niche due to high debt, little is known about their financial literacy. In this study, the authors' objective was to assess financial literacy among medical students and to evaluate demographic, educational, and financial factors associated with financial literacy. Methods: In March to April 2015, the authors administered a cross-sectional survey to all first- (M1) and fourth-year (M4) medical students at seven geographically distributed U.S. medical schools. The survey measured performance on a financial literacy assessment, educational debt burden, and past retirement contributions. Results: The survey response rate was 37.5% (1052/2806). Students answered 47.4% of the financial literacy questions correctly. Factors associated with higher (above-the-median) financial literacy performance included male gender (Odds ratio [OR] = 2.19; 95% confidence interval [CI]: 1.70-2.83; P <0.01), joint MD/MBA degree (OR = 2.47, 95% CI: 1.24-4.90; P = 0.02), finance-related undergraduate major (OR = 5.79, 95% CI: 1.02-32.92; P = 0.05), self-assessed financial knowledge (OR = 1.79, 95% CI: 1.45-2.20; P <0.01), and confidence in personal financial management (OR = 1.19, 95% CI: 1.01-1.42; P = 0.05). Financial literacy among M4s who had received school-provided personal financial counseling or information was not significantly higher than those who had not received it (50.7% vs. 50.0%, P = 0.79). A 1 percentage point increase in financial literacy performance was associated with a 3% increase in the odds of contributing to a tax-advantaged retirement account (OR = 1.03, 95% CI: 1.02-1.05; P <0.01) and over a $600 decrease in debt (β = -$642, 95% CI: -$1123-$161; P <0.01). Discussion: Financial literacy among both first-year and fourth-year U.S. medical students was low. School-provided personal financial counseling or information for fourth-year students was not associated with improved financial literacy. Students with higher financial literacy incurred less debt and were more likely to invest for retirement.