Financial Literacy Externalities
58 Pages Posted: 19 Jun 2017 Last revised: 29 Apr 2019
Date Written: June 2017
This paper uses unique administrative data and a quasi-field experiment of exogenous allocation in Sweden to estimate medium- and longer-run effects on financial behavior from exposure to financially literate neighbors. It contributes evidence of causal impact of exposure and of a social multiplier of financial knowledge, but also of unfavorable distributional aspects of externalities. Exposure promotes saving in private retirement accounts and stockholding, especially when neighbors have economics or business education, but only for educated households and when interaction possibilities are substantial. Findings point to transfer of knowledge rather than mere imitation or effects through labor, education, or mobility channels.
Keywords: financial literacy, household finance, Refugees, Social interactions
JEL Classification: D14, E21, F22, G11, I28
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