Index assessment of financial literacy of the population (In the case study of the North-Western federal district regions)

Abstract

System activities to increase the financial literacy of the population, initiated by the Government of Russia about 10 years ago, and various episodic projects implemented by commercial, educational and public organizations form a request for assessing the level of financial literacy and the effectiveness of these measures. First of all, comprehensive, accurate studies are relevant, as they make it possible to identify territorial, socio-demographic, economic and other patterns of changes in the level of financial literacy, as well as the grounds for the success of regulatory activities. The purpose of the article is to study the differentiation of the level of financial literacy by territory, socio-demographic and economic characteristics of the population. To achieve this, the original index methodology for measuring financial literacy according to “knowledge” and “skills” components has been developed by the authors. The sub-indices in subject areas (the sub-indices “income and costs”, “family budget and financial planning”, “savings and deposits”, “crediting”, “investment and taxes”, “insurance and pensions”, “risks and financial security”, “protection of consumer rights”), some particular indices of knowledge and skills, a composite index of financial literacy (range from 0 to 1) have been calculated. The list of measurable elements of financial literacy is compiled according to the model of a financially literate citizen outlined in the “Strategy for increasing financial literacy in the Russian Federation for 2017–2023”, and includes 33 items. The methodology we have developed for the assessment of financial literacy is aimed at the solution of a set of tasks, which include: identification of the key problem areas of financial literacy; determination of groups that effective financial education programs and interventions can be targeted for; identification of preferred forms and methods of providing information on the topics of interest to improve financial literacy; study the features of financial literacy in terms of socio-demographic and economic factors. The empirical foundation of the study was the data of the sociological survey “Financial literacy”, conducted the authors in 2018 in the territory of 4 regions of the North-Western Federal District (Kaliningrad, Pskov, Arkhangelsk and Vologda regions). When choosing the regions, the presence of regional programs to improve financial literacy and the level of per capita cash income of the population was taken into account. It has been revealed that the composite index of financial literacy of the population was 0.396; the maximum value of the index is observed in Arkhangelsk region (0.434), the minimum – in Vologda region (0.376). The level of financial literacy and its individual components has been differentiated according to the territorial basis, socio-demographic and economic characteristics of the population. A stable framework of subject areas in which the population implements literate skills has been highlighted; it includes the family budget and financial planning, the use of savings and loans, financial security. The dependence of financial literacy and its individual components on the level of cash incomes, which is strengthened in the context of the implementation of regional programs to improve the financial literacy of the population, has been determined. It is shown that, regardless of the region, private knowledge indices are higher than private skill indices, which indicates the presence of factors that impede the transformation of existing knowledge into practical actions of the population in the financial market. We strongly believe that it is caused by the presence of particular attitudes existed among the populating in the field of financial literacy. Therefore, at further stages of the comprehensive, accurate analysis, we intend to study a special component of financial literacy – “attitudes”, which will determine the value-motivational and psychological aspects that mediate the development of financial knowledge and skills by the population.