Keeping it simple: financial literacy and rules of thumb

Alejandro Drexler (alejandro.h.drexler@chi.frb.org), Gregory Fischer and Antoinette Schoar

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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: D14 D21 I21 J24 O12 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2010-09
References: View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Downloads: (external link)
http://eprints.lse.ac.uk/33502/ Open access version. (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:33502

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