On the drivers of financial literacy: the role of intergenerational mobility

Sara Lamboglia and Massimiliano Stacchini ()
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Massimiliano Stacchini: Bank of Italy

No 766, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: Individual characteristics, such as educational background, are important but insufficient to explain variation in financial skills among people. Using repeated cross-sectional survey data on over 145,000 individuals aged 50+ and resident in 20 European countries and Israel combined with historical country-level data, we explore the role that selected country characteristics play in stimulating financial awareness. We find a lasting effect of social mobility on financial skills: individuals who spent early adulthood in countries characterized by high intergenerational mobility proved to be more financially literate than their peers as they age. The effect is economically sizable, especially among women and individuals from disadvantaged backgrounds. The results hold in models that use country-specific cohort effects to absorb context confounders and common shocks. Our findings suggest that promoting equality of opportunities across generations is not only ethically desirable but can also enhance socially valuable spillovers such as the accumulation of skills among vulnerable citizens.

Keywords: financial literacy; intergenerational mobility; gender gap (search for similar items in EconPapers)
JEL-codes: G53 J62 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-ban, nep-eec, nep-fle and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_766_23

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