Factors that influence the financial literacy of young Spanish consumers

Abstract

This study examines the development of mathematical and financial literacy skills amongst 471 students in Spain. Most studies on this topic have looked at either one or the other skill but they have not examined the relationship between the two. The use of simultaneous equations has enabled us to do so. The aim of the paper is to disentangle the factors determining the financial skills of young consumers in Spain. To do this, the PISA Financial Literacy Assessment conducted by the OECD in 2012 is used. Our paper’s main contribution lies in the methodological way to deal with the empirical challenges overshadowing our study. Particularly, our methodological strategy is defined by the application of a multi‐level model of simultaneous equations (MSiEM). This method allows us to take into account the simultaneous determination of math and financial skills at school and the nested structure of the database. This MSiEM permits the identification of the determinants of financial skills, differentiating between the influences operating at school level from those at student level. A first conclusion is that the development of financial abilities of young consumers is mediated by their mathematical skills. A second conclusion, in accordance with those of other international studies, is the importance of the family on the financial literacy of 15‐year‐old Spanish students. The family, a first‐order determinant in reading, science and math scores, is also a key variable in the development of financial skills. Finally, school type (public vs. private) does not display any effect on either the financial or math performance of Spanish young people.

Capacitación y comportamiento financiero de la generación millennial en España

“…Igualmente, el uso o la exposición a productos financieros, como una cuenta bancaria o una tarjeta de débito de prepago, aumenta el conocimiento financiero de los estudiantes (Moreno-Herrero et al, 2018a, 2018b. También el desarrollo de las habilidades matemáticas o el nivel educativo de la familia, en particular el de la madre, ejercen un papel mediador en la evolución de las competencias financieras de los jóvenes españoles (Mancebón, Ximénez-de-Embún, Mediavilla y Gómez-Sancho, 2019). Por su parte, Cordero y Pedraja (2019) recomiendan la inclusión de la educación financiera no como asignatura en sí misma, sino transversalmente, incorporándola en otras materias, para, de este modo, mejorar la adquisición de conocimientos financieros por parte de los adolescentes.…”

Financial literacy among small and medium enterprises in Zimbabwe

“…It has been proven that financial literacy is essential in any economy (Arrellano et al 2018;Cucinelli et al 2019;Mancebon et al 2019) Kihiu 2012), the financial system (Refera et al 2016) and finally the SME sector (Adomako et al, 2015;Bruhn & Zia 2011;Gibson, McKenzie & Zia 2014;Nunoo & Andoh 2012;Wise 2013). Financial literacy is important to the individual who makes daily decisions on budgets (Capuano & Ramsay 2011;Wachira & Kihiu 2012), savings (Cole et al 2011) and wealth creation (Japelli & Padulo 2013;Lusardi & Mitchell 2011), among other critical decisions.…”

Racial/ethnic differences in consumer financial capability: The role of financial education

“…Recently, some studies examined financial capability across different countries such as Canada, Italy, the United Kingdom, the United States (Nicolini et al, 2013), Poland (Potocki & Cierpiał-Wolan, 2019), South Africa (Reyers, 2019), Spain (Mancebon et al, 2019) and Malaysia (Hamid & Loke, 2020). However, the issue of racial/ethnic differences in financial capability has been understudied relatively with an exception that examined White and minority differences in financial literacy (Al-Bahrani et al, 2019).…”