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Keeping it simple: financial literacy and rules of thumb

Alejandro Drexler (), 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)
Date: 2010-09
References: View complete reference list from CitEc
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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) Downloads
Working Paper: Keeping it simple: financial literacy and rules of thumb (2014) Downloads
Working Paper: Keeping it Simple: Financial Literacy and Rules of Thumb (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:33502

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