Keeping it simple: financial literacy and rules of thumb

Drexler, Alejandro, Fischer, Gregory and Schoar, Antoinette (2010) Keeping it simple: financial literacy and rules of thumb. Development economics (7994). CERP, London, UK.

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Abstract

Individuals and business owners engage in an increasingly complex array of financial decisions that are critical for their success and well-being. Yet a growing literature documents that in both developed and developing countries, a large fraction of the population is unprepared to make these decisions. Evidence on potential remedies is limited and mixed. Two randomized trials test the impact of financial training on firm-level and individual outcomes for microentrepreneurs in the Dominican Republic. We find no significant effect from a standard, fundamentals-based accounting training. However, a simplified, rule-of-thumb training produced significant and economically meaningful improvements in business practices and outcomes.

Item Type:	Monograph (Discussion Paper)
Official URL:	http://www.cepr.org/default_static.htm
Additional Information:	© 2010 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HC Economic History and Conditions
JEL classification:	D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Personal Finance D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior I - Health, Education, and Welfare > I2 - Education > I21 - Analysis of Education J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
Date Deposited:	22 Mar 2011 16:10
Last Modified:	15 Sep 2023 23:21
URI:	http://eprints.lse.ac.uk/id/eprint/33502

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