Financial literacy and the use of financial services by US households

James Barth, Valentina Hartarska (), Jitka Hilliard and Nguyen Nguyen

Chapter 16 in Handbook of Microfinance, Financial Inclusion and Development, 2023, pp 297-315 from Edward Elgar Publishing

Abstract: The purpose of this paper is to examine whether financial literacy is associated with the type of financial services used by households in counties throughout the United States. We classify households as Banked (those with a bank account), underbanked (those with a bank account who also use alternative financial services or AFSs), and unbanked (those without a bank account). Our empirical results indicate that financial literacy does indeed affect the likelihood that a household is banked, underbanked or unbanked, controlling for various characteristics of households and the density of bank offices and AFSs in the counties in which households are located. Financial literacy, moreover, affects the use of different alternative financial services, including payday loans, auto title loans, pawnshop loans, tax anticipation loans, and rent-to-own services. In addition, financial literacy may lead households to use less appropriate and affordable financial services, which lowers the degree of financial inclusion in a country. Our findings have both practical and policy implications.

Keywords: Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/edcoll/9781789903874/9781789903874.00025.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

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:elg:eechap:19107_16

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().