Faculty of Economics and Business Administration Publications Database

Financial Literacy Externalities

Jansson, Thomas
Karabulut, Yigitcan
Volume: 33
Number: 2
Pages: 950 - 989
Month: February
ISSN-Print: 0893-9454
Link External Source: Online Version
Year: 2020
Keywords: Household finance, financial literacy, social interactions, refugees

This paper uses unique administrative data and a quasi-field experiment of exoge- nous allocation 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 exposure and of a social multiplier of financial knowledge, but also of unfavorable distributional aspects of externalities. Exposure promotes saving in private retirement accounts and stockholding, especially when neighbors have economics or business education, but only for educated households and when interaction possibilities are substantial. Findings point to transfer of knowledge rather than mere imitation or effects through labor, education, or mobility channels.