Keeping it Simple: Financial Literacy and Rules of Thumb

Antoinette Schoar, Greg Fischer and Alejandro Drexler ()

No 7994, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed. Two randomized trials test the impact of financial training on firm-level and individual outcomes for microentrepreneurs in the Dominican Republic. We find no significant effect from a standard, fundamentals-based accounting training. However, a simplified, rule-of-thumb training produced significant and economically meaningful improvements in business practices and outcomes.

Keywords: Adult education; Business training; entrepreneurship; Financial literacy (search for similar items in EconPapers)
JEL-codes: C93 D14 D21 I21 J24 O12 (search for similar items in EconPapers)
Date: 2010-09
References: View complete reference list from CitEc
Citations: View citations in EconPapers (93)

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Related works:
Journal Article: Keeping It Simple: Financial Literacy and Rules of Thumb (2014)
Working Paper: Keeping it simple: financial literacy and rules of thumb (2014)
Working Paper: Keeping it simple: financial literacy and rules of thumb (2010)
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