Determinants and Impacts of Financial Literacy in the Lao PDR

34 Pages Posted: 19 Apr 2019

See all articles by Peter Morgan

Peter Morgan

ADBI

Long Q. Trinh

Asian Development Bank Institute

Date Written: March 6, 2019

Abstract

However, internationally comparable information on financial literacy is still scarce. The Organisation for Economic Cooperation and Development International Network on Financial Education (OECD/INFE) survey of adult financial literacy is a standardized survey instrument, but so far has mainly been implemented in higher-income countries outside of Asia. Our paper extends the literature by conducting the survey in a relatively low-income Asian economy — the Lao PDR — and analyzing the determinants of financial literacy and the effects of financial literacy on other behaviors. We also compare these results with those of our earlier study of financial literacy in Cambodia and Viet Nam. This study of the Lao PDR extends our research in the Cambodia-Lao PDR-Myanmar-Viet Nam (CLMV) region, and the survey was broadened to include more variables that could be used as effective instrumental variables for financial literacy to deal with possible endogeneity problems. This increases our confidence in our findings that financial literacy positively affects both savings and financial inclusion.

Keywords: financial literacy, financial behavior, financial inclusion, household saving, Cambodia, Lao PDR, Viet Nam

JEL Classification: D14, G11, J26

Suggested Citation

Morgan, Peter J. and Trinh, Long Q., Determinants and Impacts of Financial Literacy in the Lao PDR (March 6, 2019). ADBI Working Paper 928, Available at SSRN: https://ssrn.com/abstract=3374793 or http://dx.doi.org/10.2139/ssrn.3374793

Peter J. Morgan (Contact Author)

ADBI ( email )

Kasumigaseki Building 8F 3-2-5
Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Long Q. Trinh

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

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