Recent empirical literature provides evidence that financial literacy, human capital, education, saving, and stock market participation are interconnected decisions. However, a consolidated theoretical explanation of such connections is missing. We contribute to this topic by building a framework that includes all these decisions in an encompassing model. We build a two-period model in which individuals acquire education, work, and save for retirement; financial literacy reduces the costs of managing risky assets available on the stock market. Our results, besides providing a theoretical foundation for the role and the determinants of the above-mentioned decisions, can also explain several stylized facts on literacy, human capital, and stock market participation.

Endogenous Financial Literacy, Saving, and Stock Market Participation

SPATARO, LUCA;CORSINI, LORENZO
2017

Abstract

Recent empirical literature provides evidence that financial literacy, human capital, education, saving, and stock market participation are interconnected decisions. However, a consolidated theoretical explanation of such connections is missing. We contribute to this topic by building a framework that includes all these decisions in an encompassing model. We build a two-period model in which individuals acquire education, work, and save for retirement; financial literacy reduces the costs of managing risky assets available on the stock market. Our results, besides providing a theoretical foundation for the role and the determinants of the above-mentioned decisions, can also explain several stylized facts on literacy, human capital, and stock market participation.
Spataro, Luca; Corsini, Lorenzo
File in questo prodotto:
File Dimensione Formato  
ACCEPTED MANUSCRIPT.pdf

accesso aperto

Tipologia: Documento in Post-print
Licenza: Tutti i diritti riservati (All rights reserved)
Dimensione 801.38 kB
Formato Adobe PDF
801.38 kB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11568/856720
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 4
  • ???jsp.display-item.citation.isi??? 4
social impact