Endogenous financial literacy, saving and stock market participation

Spataro, Luca and Corsini, Lorenzo (2013): Endogenous financial literacy, saving and stock market participation.

Abstract

There is a consolidated empirical literature providing evidence of the fact that financial literacy, human capital, savings and stock market participation are interconnected decisions. However, to the best of our knowledge, a theoretical explanation of such connections is missing. In this paper we aim at filling this gap, by building a framework that includes all these decisions in an encompassing model. The results of our model provide a theoretical foundation for the role and the determinants of financial literacy and are able to explain several stylized facts on literacy and stock market participation.

• Item Type: MPRA Paper
• Language: English
• Keywords: financial literacy, human capital, savings, stock market participation
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving; Personal Finance; D - Microeconomics > D9 - Intertemporal Choice > D91 - Intertemporal Household Choice ; Life Cycle Models and Saving; G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

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