Fintech Adoption Across Generations: Financial Fitness in the Information Age

44 Pages Posted: 11 Sep 2017 Last revised: 21 Sep 2017

See all articles by Bruce I. Carlin

Bruce I. Carlin

University of California, Los Angeles (UCLA) - Anderson School of Management

Arna Olafsson

Copenhagen Business School

Michaela Pagel

University of California, Berkeley

Date Written: September 2017

Abstract

This paper analyzes how better access to financial information via new technology changes use of consumer credit and affects financial fitness. We exploit the introduction of a smartphone application for personal financial management as a source of exogenous variation. FinTech adoption reduces financial fee payments and penalties, but differs cross-sectionally in the population. After adopting the new technology, Millennials and members of Generation X incur fewer financial fees and penalties, whereas Baby Boomers do not benefit from the technological advance. Millennials and Gen Xers save fees by using their credit cards rather than overdrafts to manage short-term liabilities. Moreover, Millennials shift some of their spending to discretionary entertainment, whereas members of Generation X remain more austere. Finally, while men tend to adopt new technology and access information at a higher rate, the economic impact of access is larger for women.

Suggested Citation

Carlin, Bruce I. and Olafsson, Arna and Pagel, Michaela, Fintech Adoption Across Generations: Financial Fitness in the Information Age (September 2017). NBER Working Paper No. w23798. Available at SSRN: https://ssrn.com/abstract=3035156

Bruce I. Carlin (Contact Author)

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

Arna Olafsson

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Michaela Pagel

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

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