Scandinavian Working Papers in Economics

Working Paper Series,
Sveriges Riksbank (Central Bank of Sweden)

No 333: Financial Literacy Externalities

Michael Haliassos (), Thomas Jansson () and Yigitcan Karabulut ()
Additional contact information
Michael Haliassos: Goethe University Frankfurt, Postal: Theodor-W.-Adorno-Platz 3, PFH32, 60323 Frankfurt am Main, Germany
Thomas Jansson: Research Department, Central Bank of Sweden, Postal: Sveriges Riksbank, SE-103 37 Stockholm, Sweden
Yigitcan Karabulut: Rotterdam School of Management, Erasmus University, Postal: Burgemeester Oudlaan 50, Bayle Building, 3062 PA Rotterdam, Nederländerna

Abstract: This paper uses unique administrative data and a quasi-field experiment of exogenous allocation to apartments 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 financial literacy and points to a social multiplier of effective programs to enhance it. Exposure promotes saving in private retirement accounts and stockholding, especially when neighbors have economics or business education, but only for educated or male-headed households. Findings point to relevant knowledge transfer through social interactions rather than to labor market or other channels linked to local economic conditions.

Keywords: Household finance; financial literacy; social interactions; refugees

JEL-codes: D14; E21; F22; G11; I28

49 pages, First version: March 1, 2017. Revised: October 1, 2017.

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