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Financial literacy, human capital and long-run economic growth

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  • Bucci, Alberto
  • Calcagno, Riccardo
  • Marsiglio, Simone
  • Sequeira, Tiago Neves

Abstract

Financial literacy has gained momentum in the policy arena and several countries are currently promoting it. Despite the undeniable importance of financial literacy in improving the allocation of savings across alternative uses, the impact of these policies on economic growth is not obvious. Indeed, financial literacy is a specialized form of human capital, thus favoring financial education may deter general education eventually generating detrimental effects on growth. This paper relies on an endogenous growth framework where human capital can be employed to accumulate financial literacy to assess the conditions under which the current policy setting may be beneficial in the long run. Our calibration based on the US economy over the 1950–2019 period shows that this may effectively be the case if the impact of financial literacy on the allocational efficiency of the financial sector is sufficiently strong.

Suggested Citation

  • Bucci, Alberto & Calcagno, Riccardo & Marsiglio, Simone & Sequeira, Tiago Neves, 2025. "Financial literacy, human capital and long-run economic growth," The North American Journal of Economics and Finance, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:ecofin:v:80:y:2025:i:c:s1062940825001081
    DOI: 10.1016/j.najef.2025.102468
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    Keywords

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    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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