Socio-economic inequality in young people's financial capabilities

Jake Anders, John Jerrim () and Lindsey Macmillan ()
Additional contact information
John Jerrim: UCL Social Research Institute
Lindsey Macmillan: UCL Centre for Education Policy & Equalising Opportunities

No 22-03, CEPEO Working Paper Series from UCL Centre for Education Policy and Equalising Opportunities

Abstract: Previous research has shown that the UK has low levels of financial literacy by international standards, particularly among those in lower socio-economic groups. This may, in turn, have an impact upon young people, with social inequalities in financial attitudes, behaviours and skills perpetuating across generations. Yet there has been relatively little empirical research on this topic to date, including how such inequalities may be linked to the parents' actions and financial education provided by schools. This paper provides new evidence on this issue for the UK. Using parent-child linked survey data from 3,745 families, we find sizeable socio-economic inequalities in young people's financial capabilities, aspects of their mindset, and their financial behaviours. 15-year-olds from disadvantaged backgrounds having similar financial skills to an 11-year-old from an affluent background. Sizeable differences are also observed in the financial education that socio-economically advantaged and disadvantaged children receive at school, and how they interact with their parents about money. Parental interactions can account for part of the socio-economic gap in money confidence, money management, financial connections, and financial behaviours, but less so in boosting financial abilities. However, we find no evidence of differences in financial education in schools driving differences in young people's financial capabilities.

Keywords: Socio-economic inequality; financial capabilities; financial education; intergenerational transmission. (search for similar items in EconPapers)
JEL-codes: I24 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2022-02, Revised 2022-02
New Economics Papers: this item is included in nep-eur, nep-fle and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec-cepeo.ucl.ac.uk/cepeow/cepeowp22-03.pdf First version, 2022 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucl:cepeow:22-03

Access Statistics for this paper

More papers in CEPEO Working Paper Series from UCL Centre for Education Policy and Equalising Opportunities Contact information at EDIRC.
Bibliographic data for series maintained by Jake Anders ().