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On the drivers of financial literacy: the role of intergenerational mobility

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  • Sara Lamboglia

    (Bank of Italy, Directorate General for Consumer protection and Financial Education)

  • Massimiliano Stacchini

    (Bank of Italy, Directorate General for Consumer protection and Financial Education)

Abstract

Individual characteristics, such as educational background, are important but insufficient to explain variation in financial literacy among people. Using repeated cross-sectional survey data on over 130,000 individuals aged 50+ and residing in 20 European countries and Israel combined with historical country-level data, we explore the role that selected country characteristics play in stimulating the acquisition of financial literacy. We find a lasting effect of social mobility on financial literacy: individuals who spent early adulthood in countries characterised by high intergenerational mobility proved to be more financially literate than their peers as they age. The effect is economically sizable, especially among women and individuals from disadvantaged backgrounds. The results hold in models that use country-specific cohort effects to absorb context confounders and common shocks. Our findings suggest that promoting equality of opportunities across generations is not only ethically desirable but can also enhance socially valuable spillovers such as the accumulation of skills among vulnerable population groups.

Suggested Citation

  • Sara Lamboglia & Massimiliano Stacchini, 2025. "On the drivers of financial literacy: the role of intergenerational mobility," Empirical Economics, Springer, vol. 68(2), pages 667-695, February.
    • Handle: RePEc:spr:empeco:v:68:y:2025:i:2:d:10.1007_s00181-024-02657-1
    DOI: 10.1007/s00181-024-02657-1
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    More about this item

    Keywords

    Financial literacy; Intergenerational mobility; Gender gap;
    All these keywords.

    JEL classification:

    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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