Working Paper: CEPR ID: DP18363
Authors: Laura Bottazzi; Noemi Oggero
Abstract: In this paper, we examine financial literacy and financial resilience in Italy. We show that financial literacy is particularly low among the young, women, and the less-educated. We also highlight regional differences in financial knowledge, with individuals in Southern Italy performing worse. We find that the lack of financial literacy increases the probability of being unable to face financial shocks and leads to an over-accumulation of debt. Hence, our results support the hypothesis that financial literacy can be considered an enabling factor for financial resilience.
Keywords: financial literacy; personal finance; financial resilience; financial fragility; debt
JEL Codes: D14; G41; G51; G53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial literacy (G53) | financial fragility (G51) |
| financial literacy (G53) | overindebtedness (G33) |
| low financial literacy (G53) | inability to face financial shocks (G59) |
| lack of financial literacy (G53) | overaccumulation of debt (F65) |