This study analyses whether self-confidence affects financial abilities of young people in Spain, through financial literacy.
We use data from the Programme for International Student Assessment (PISA) Financial Literacy (2012) report, conducted by the OECD. Our hypothesis is that non-cognitive factors are important to establish young people’s financial literacy. Financial knowledge, together with other personal attitudes, determines people’s financial behaviour. We focus on the role of self-confidence in four dimensions. First, the student’s self-confidence in the environment of their college; second, self-confidence referring to the utility found at school; third, self-confidence in relation to the results obtained; and finally, self-confidence in a broader sense. Our multi-level estimates show that students with higher levels of self-confidence score higher in financial literacy tests, whatever the dimension considered. Beyond the individual’s inherent characteristics, there are other factors such as maturity, gender, socio-economic characteristics and the surroundings, which also influence financial literacy.
How individuals and families conduct their financial dealings is an essential component of economic well-being.
The results show that individuals with higher levels of self-confidence score higher in financial literacy tests.
There are other factors such as maturity, gender, socio-economic characteristics and the surroundings, which also influence financial literacy.
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