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The Economic and Social Value of Financial Literacy

The Economic and Social Value of Financial Literacy

José Manuel Sánchez Santos
Copyright: © 2020 |Pages: 28
ISBN13: 9781799824404|ISBN10: 1799824403|ISBN13 Softcover: 9781799824435|EISBN13: 9781799824411
DOI: 10.4018/978-1-7998-2440-4.ch009
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MLA

Sánchez Santos, José Manuel. "The Economic and Social Value of Financial Literacy." Emerging Tools and Strategies for Financial Management, edited by Begoña Álvarez-García and José-Pablo Abeal-Vázquez, IGI Global, 2020, pp. 199-226. https://doi.org/10.4018/978-1-7998-2440-4.ch009

APA

Sánchez Santos, J. M. (2020). The Economic and Social Value of Financial Literacy. In B. Álvarez-García & J. Abeal-Vázquez (Eds.), Emerging Tools and Strategies for Financial Management (pp. 199-226). IGI Global. https://doi.org/10.4018/978-1-7998-2440-4.ch009

Chicago

Sánchez Santos, José Manuel. "The Economic and Social Value of Financial Literacy." In Emerging Tools and Strategies for Financial Management, edited by Begoña Álvarez-García and José-Pablo Abeal-Vázquez, 199-226. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-7998-2440-4.ch009

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Abstract

The main objective of this chapter is to provide new insights into the economic and social value that financial literacy has for individuals and societies. Financial literacy has implications that are relevant both at a micro (especially for households) and macro-level (for the financial system and for the national economy as a whole). On the one hand, a lack of financial literacy put households a risk from making sub-optimal financial decisions and prevent them to maximize their wellbeing. On the other hand, financial literacy favors a better allocation of resources, reduces the risks associated with episodes of financial instability, and therefore, contributes to the increase of social welfare. The analysis and the empirical evidence showing the benefits (costs) of financial literacy (illiteracy) allows to conclude that policymakers have a key role to play implementing initiatives aiming to improve financial literacy of the population at all stages of life.

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