Aktuelles – Details

23. Februar 2021
Vorträge

The Effect of Financial Literacy on Granting Third-Party Guarantees

Ein Vortrag von Christa Hainz (ifo Center for International Institutional Comparisons and Migration Research) im Rahmen der Seminarreihe des AB Ökonomie am IOS.
Datum: 23. Februar 2021
Zeit: 13.30 Uhr
Ort: Online via Zoom, Anmeldung

Granting a third-party guarantee for a loan does not involve an initial financial transaction. Therefore, guarantors might not understand that they are taking on a liability, albeit contingent. We introduce knowledge about guarantees as a novel and distinct concept of financial literacy. For ten Eastern European countries, we find that 45 percent of individuals lack this form of financial literacy. Instrumenting guarantee literacy with regional cohort-specific financial literacy, we show that guarantee literacy significantly reduces an individual’s propensity to act as a guarantor. Our results are robust to a placebo analysis and several sensitivity checks.