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Financial Literacy and Attitudes to Redistribution

Author

Listed:
  • Alberto Montagnoli

    (Department of Economics, University of Sheffield)

  • Mirko Moro

    (University of Stirling)

  • Georgios A. Panos

    (Adam Smith Business School, University of Glasgow)

  • Robert E. Wright

    (University of Strathclyde Business School)

Abstract

This study combines novel financial-literacy data with measures of attitudes to redistribution from the British Election Study. We find a significant negative relationship between financial literacy and attitudes in favour of government intervention for income redistribution. The effect is robust to several specifications, samples, longitudinal models and instrumental variable regressions. Falsification tests show that these results are independent of generic attitudes towards other types of inequality/discrimination, e.g. based on gender, race or sexual orientation. An inquiry into the mechanisms of the effect indicates that the homo oeconomicus effect does not exert an impact on attitudes to redistribution for the less financially literate.

Suggested Citation

  • Alberto Montagnoli & Mirko Moro & Georgios A. Panos & Robert E. Wright, 2017. "Financial Literacy and Attitudes to Redistribution," Working Papers 2017007, The University of Sheffield, Department of Economics.
    • Handle: RePEc:shf:wpaper:2017007
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    File URL: http://www.sheffield.ac.uk/economics/research/serps/articles/2017_007
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    1. Fornero, Elsa & Lo Prete, Anna, 2019. "Voting in the aftermath of a pension reform: the role of financial literacy," Journal of Pension Economics and Finance, Cambridge University Press, vol. 18(1), pages 1-30, January.

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    More about this item

    Keywords

    Financial literacy; redistribution; inequality; attitudes; Great Britain;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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