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The impact of financial literacy on education investment: Empirical evidence from low-income youth

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  • Xiao, Long
  • Ma, Jingxia

Abstract

In recent years, financial literacy has gained increasing attention as a crucial factor influencing individuals' economic behaviors, particularly in the context of low-income youth. Based on panel data from Chinese cities between 2012 and 2023, this study explores the relationships among financial literacy, perception of labor market risk, and educational investment among low-income youth. The results indicate a significant positive relationship between financial literacy (FL) and educational investment among low-income youth. Moreover, perception of labor market risk moderates the relationship between FL and educational investment among low-income youth. The impact of FL on educational investment among low-income youth varies across regions with different levels of urbanization, economic development, and tax burden. Based on these findings, this paper proposes policy recommendations such as enhancing FL education, improving the social security system, and optimizing the allocation of educational resources in low-income areas.

Suggested Citation

  • Xiao, Long & Ma, Jingxia, 2026. "The impact of financial literacy on education investment: Empirical evidence from low-income youth," Finance Research Letters, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finlet:v:106:y:2026:i:c:s1544612326008445
    DOI: 10.1016/j.frl.2026.110316
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