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

Sara Lamboglia () and Massimiliano Stacchini
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Sara Lamboglia: Bank of Italy, Directorate General for Consumer protection and Financial Education
Massimiliano Stacchini: Bank of Italy, Directorate General for Consumer protection and Financial Education

Empirical Economics, 2025, vol. 68, issue 2, No 8, 667-695

Abstract: Abstract Individual characteristics, such as educational background, are important but insufficient to explain variation in financial literacy among people. Using repeated cross-sectional survey data on over 130,000 individuals aged 50+ and residing in 20 European countries and Israel combined with historical country-level data, we explore the role that selected country characteristics play in stimulating the acquisition of financial literacy. We find a lasting effect of social mobility on financial literacy: individuals who spent early adulthood in countries characterised 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 population groups.

Keywords: Financial literacy; Intergenerational mobility; Gender gap (search for similar items in EconPapers)
JEL-codes: G53 J52 J62 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s00181-024-02657-1

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