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Culture and Financial Literacy

56 Pages Posted: 14 Feb 2017 Last revised: 17 Jul 2017

Martin Brown

University of St. Gallen - Swiss Institute of Banking and Finance

Caroline Henchoz

University of Fribourg

Thomas Spycher

University of St. Gallen - School of Finance

Date Written: July 1, 2017

Abstract

We study the effect of culture on financial literacy by comparing secondary-school students along the German-French language border within Switzerland. We find that students in the French-speaking area have a lower level of financial literacy than students in the German-speaking area. The difference in financial literacy across the language groups is stronger among native students than among Immigrant students. A mediation analysis suggests that the cultural divide in financial literacy is mainly related to systematic differences in financial socialisation across the language groups. Students in the German speaking region are more likely to receive pocket money at an early age and are more likely to have independent access to a bank account.

Keywords: Culture, Financial Literacy, Financial Socialisation

JEL Classification: D03, D14, Z10

Suggested Citation

Brown, Martin and Henchoz, Caroline and Spycher, Thomas, Culture and Financial Literacy (July 1, 2017). University of St.Gallen, School of Finance Research Paper No. 2017/03. Available at SSRN: https://ssrn.com/abstract=2916636 or http://dx.doi.org/10.2139/ssrn.2916636

Martin Brown (Contact Author)

University of St. Gallen - Swiss Institute of Banking and Finance ( email )

Rosenbergstrasse 52
St. Gallen, CH-9000
Switzerland

Caroline Henchoz

University of Fribourg ( email )

Avenue de l'Europe 20
CH-1700 Fribourg
Switzerland

Thomas Spycher

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St.Gallen, CH-9000
Switzerland

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