Financial capability and financial behaviour of the millennial generation in Spain
Article Sidebar
Main Article Content
Abstract
Individuals’ financial capability, resulting from the combination of the financial literacy they have and the opportunity to access financial products, is a challenge in today's societies and, particularly, for certain population groups such as the millennial generation. For this reason, it is important to study the financial capability of millennials and to validate whether there are differences regarding that of preceding generations. After the literature review, the empirical analysis is carried out using a sample based on the Survey of Financial Competences (SFC). The sample is composed of 6,852 non-retired individuals under 65 years of age, of which approximately 34% are millennials. Descriptive and econometric analyses are based on this sample. However, financial inclusion is more related to the financial behaviours of respondents. This relationship is clear, regardless of the generational cohort analysed, in the delay in payments, the maintenance of emergency funds and the financial planning horizon. It is also found that the correlation of some behaviours with financial literacy is more similar between millennials and non-millennials than when the former is compared with their peers. This research contributes to the existing financial literature through the analysis of the financial capability of the Spanish millennial generation and the analysis of how this capability influences its financial behaviour. In this sense, the research brings empirical evidence to a field of study in which there is hardly any reference that goes beyond descriptive analyses focused on AngloSaxon contexts.
Keywords:
Cited by
Article Details
References
Anderloni, L., Bayot, B., Bledowski, P., Iwanicz-Drozdowska, M., y Kempson, E. (2008). Financial services provision and prevention of financial exclusion. Brussels, Belgium: European Commission. Recuperado de: https://www.bristol.ac.uk/media-library/sites/geography/migrated/documents/pfrc0807.pdf
Banco de España. (2019). The Survey of Financial Competences (ECF) 2016 User Guide. Madrid: Banco de España. Recuperado de: https://www.bde.es/f/webbde/SES/estadis/otras_estadis/2016/UserGuide_ECF.pdf
Bover, O., Hospido, L., y Villanueva, E. (2019). The Survey of Financial Competences (ECF): Description and methods of the 2016 wave. Banco de España Occasional Paper No. 1909. Madrid: Banco de España. DOI: https://doi.org/10.2139/ssrn.3396964
Campos, J. (2019). La educación financiera como base de la cultura del ahorro y la previsión social. Barcelona: Universitat de Barcelona. Recuperado de: http://diposit.ub.edu/dspace/bitstream/2445/144301/1/TFM-DEAF-240_Campos.pdf
Cole, S., Paulson, A., y Shastry, G. K. (2016). High school curriculum and financial outcomes: The impact of mandated personal finance and mathematics courses. Journal of Human Resources, 51(3), 656-698. DOI: https://doi.org/10.3368/jhr.51.3.0113-5410r1
Cordero, J. M., y Pedraja, F. (2019). The effect of financial education training on the financial literacy of Spanish students in PISA. Applied Economics, 51(16), 1679-1693. DOI: https://doi.org/10.1080/00036846.2018.1528336
Cornejo-Saavedra, E., Umaña-Hermosilla, B., Guíñez Cabrera, N., Muñoz-Silva, D., y Mardones-Lagos, C. (2017). Endeudamiento y educación financiera del adulto joven en Chile. RAN: Revista Academia & Negocios, 3(2), 33-44. Recuperado de: https://dialnet.unirioja.es/servlet/articulo?codigo=6229834
Cramer, R. (2014). Millennials rising: Coming of age in the wake of the great recession. New America, 11-16. Recuperado de: https://d1y8sb8igg2f8e.cloudfront.net/documents/Millennials_Rising_Coming_of_Age_in_the_Wake_of_the_Great_Recession_hPH6qs7.pdf
Cutler, N. E. (2015). Millennials and finance: The “Amazon generation”. Journal of Financial Service Professionals, 69(6), 33-39.
de Bassa, C., Lusardi, A., y Yakoboski, P. J. (2014). College-Educated millennials: An overview of their personal finances. New York, NY: TIAA-CREF Institute. Recuperado de: https://millennialmoney.com/wp-content/uploads/2015/09/millennials_personal_finances_feb2014.pdf
Fernández-López, S., Vivel-Búa, M., Rey-Ares, L., y Sixto-Puente, E. (2020). Ahorro y jubilación entre los “millennials” españoles: un enfoque exploratorio. European Journal of Applied Business and Management, 6(1), 24-47. Recuperado de: http://nidisag.isag.pt/index.php/IJAM/article/view/481
Foster, F. D., Ng, J., y Wee, M. (2015). Presentation format and financial literacy: Accessibility and assessability of retirement savings statements. Journal of Consumer Affairs, 49(3), 519-549. DOI: https://doi.org/10.1111/joca.12087
Friedline, T., y West, S. (2016). Financial education is not enough: Millennials may need financial capability to demonstrate healthier financial behaviors. Journal of Family and Economic Issues, 37(4), 649-671. DOI: https://doi.org/10.1007/s10834-015-9475-y
Global Financial Literacy Excelence Center. (2020). S&P Global FinLit Survey. Washington, DC: Global Financial Literacy Excelence Center. Recuperado de: https://gflec.org/initiatives/sp-global-finlit-survey/
Hastings, J. S., Madrian, B. C., y Skimmyhorn, B. (2013). Financial literacy, financial education, and economic outcomes. Annual Review of Economics, 5, 347-373. DOI: https://doi.org/10.1146/annurev-economics-082312-125807
Kim, K. T., Anderson, S. G., y Seay, M. C. (2019). Financial knowledge and short-term and long-term financial behaviors of millennials in the United States. Journal of Family and Economic Issues, 40(2), 194-208. DOI: https://doi.org/10.1007/s10834-018-9595-2
Klapper, L., Lusardi, A., y van Oudheusden, P. (2015). Financial literacy around the world. Insights from the Standard & Poor’s Ratings Services Global Financial Literacy Survey. Washington, DC: Standard & Poor’s. Recuperado de: https://responsiblefinanceforum.org/wp-content/uploads/2015/12/2015-Finlit_paper_17_F3_SINGLES.pdf
Lövgren, A., y Magnusson, M. (2016). Exploring how to engage Swedish millennial with pension planning. (Master of Science Thesis INDEK 2016:49KTH Industrial Engineering and Management). Stockholm, Sweden: KTH Industrial Engineering and Management. Recuperado de: http://www.diva-portal.org/smash/get/diva2:947275/FULLTEXT01.pdf
Lusardi, A., y Mitchell, O. S. (2007). Financial literacy and retirement planning in the United States. Journal of Pension Economics and Finance, 10(04), 509-525. DOI: https://doi.org/10.1017/S147474721100045X
Lusardi, A., y Mitchell, O. S. (2011). Financial literacy around the world: An overview. NBER Working Paper 17107. Cambridge, MA: National Bureau of Economic Research (NBER). Recuperado de: https://www.nber.org/papers/w17107
Lusardi, A., y Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44. DOI: https://doi.org/10.1257/jel.52.1.5
Mancebón, M. J., Ximénez‐de‐Embún, D. P., Mediavilla, M., y Gómez‐Sancho, J. M. (2019). Factors that influence the financial literacy of young Spanish consumers. International Journal of Consumer Studies, 43(2), 227-235. DOI: https://doi.org/10.1111/ijcs.12502
McLendon, T. (2016). The millennial investor: Mutual funds versus exchange traded funds. (An Honors Thesis submitted in partial fulfillment of the requirements for the degree Bachelor of Science in Business Administration in Finance). Fayetteville, AR: Sam M. Walton College of Business. University of Arkansas. Recuperado de:https://scholarworks.uark.edu/cgi/viewcontent.cgi?referer=https://scholar.google.es/&httpsredir=1&article=1024&context=finnuht
Ministerio de Educación, Cultura y Deporte. (2014). PISA 2012: competencia financiera. Informe español. Madrid: Secretaría General de Documentación y Publicaciones. Recuperado de: https://sede.educacion.gob.es/publiventa/pisa-2012-competencia-financiera-informe-espanol/ensenanzafinanzas/20001
Molina, J. A., Marcenaro, O., y Martín, A. (2015). Educación financiera y sistemas educativos en la OCDE: un análisis comparativo con datos PISA 2012. Revista de Educación, 369, 85-108. Recuperado de: https://sede.educacion.gob.es/publiventa/d/20398/19/0
Moreno-Herrero, D., Salas-Velasco, M., y Sánchez-Campillo, J. (2018a). The knowledge and skills that are essential to make financial decisions: First results from PISA 2012. FinanzArchiv: Public Finance Analysis, 74(3), 293-339. DOI: https://doi.org/10.1628/fa-2018-0009
Moreno-Herrero, D., Salas-Velasco, M., y Sánchez-Campillo, J. (2018b). Factors that influence the level of financial literacy among young people: The role of parental engagement and students’ experiences with money matters. Children and Youth Services Review, 95, 334-351. DOI: https://doi.org/10.1016/j.childyouth.2018.10.042
Mottola, G. R. (2014). The financial capability of young adults – A generational view. Washington, DC: FINRA Financial. Recuperado de: https://www.finra.org/sites/default/files/14_0100%201_IEF_Research%20Report_CEA_3%206%2014%20%28FINAL%29_0_0.pdf
Organisation for Economic Co-operation and Development. (2013). PISA 2012 assessment and analytical framework: Mathematics, reading, science, problem solving and financial literacy. Paris, France: OECD. Recuperado de: https://www.oecd.org/pisa/pisaproducts/PISA%202012%20framework%20e-book_final.pdf
Organisation for Economic Co-operation and Development. (2016). PISA 2015 assessment and analytical framework: Science, reading, mathematic and financial literacy. Paris, France:
OECD. Recuperado de: https://www.oecd.org/publications/pisa-2015-assessment-and-analytical-framework-9789264281820en.htm
Pumares-Iglesias, T., Fernández- López, S., Vivel-Búa, M., y Rey-Ares, L. (2015). A participación no mercado de valores: por que invisten os individuos? Revista Galega de Economía, 24(1), 17-30. Recuperado de: https://revistas.usc.gal/index.php/rge/article/view/2681
Rodríguez-Castellanos, A. (2019). Complejidad, incertidumbre y crisis financiera. En A. M. Gil-Lafuente (Coord.), Complejidad financiera: mutabilidad e incertidumbre en instituciones, mercados y productos (pp. 111-138). Barcelona: Real Academia de Ciencias Económicas y Financieras.
Sherraden, M. S. (2013). Building blocks of financial capability. En J. Birkenmaier, M. S. Sherraden y J. Curley (Eds.), Financial education and capability: Research, education, policy, and practice (pp. 3-43). New York, NY: Oxford University Press.
Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., y Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470. DOI: https://doi.org/10.1007/s10964-009-9432-x
Van Rooij, M., Lusardi, A., y Alessie, R. (2012). Financial literacy, retirement planning and household welath. The Economic Journal, 122(560), 449-478. DOI: https://doi.org/10.1111/j.1468-0297.2012.02501.x
Yao, R., y Cheng, G. (2017). Millennials’ retirement saving behavior: Account ownership and balance. Family and Consumer Sciences Research Journal, 46(2), 110-128. DOI: https://doi.org/10.1111/fcsr.12241
Most read articles by the same author(s)
- Sandra Castro-González, Belén Bande, Influence of ethical leadership and CSR perception on sales force performance , Revista Galega de Economía: Vol 28 No 3 (2019)
- Marcos Álvarez-Espiño, Sara Fernández-López, Lucía Rey-Ares, Profile of financially fragile households: Comparative analysis of Galicia and Spain , Revista Galega de Economía: Vol 32 No 1 (2023)