Banks Information Policies, Financial Literacy and Household Wealth A

We investigate the causal effect of financial literacy on financial assets, exploiting banks information policies for identification. In Italy, banks who belong to the PattiChiari consortium have implemented policies aimed at increasing transparency and procedural simplification. These policies may affect individuals' financial literacy without involving any direct cost for clients in terms of time, effort or resources, as we show in the paper. We exploit confidential information on whether individuals have their main bank account in one bank in the PattiChiari consortium to instrument their financial literacy level. We show that these policies have a positive and significant effect on both knowledge of financial instruments and household financial assets. Our results suggest that banks information policies have the potential to be an effective tool to increase individuals' financial literacy and that the relationship between financial literacy and wealth is largely underestimated by standard regression models

Labour Supply Responses to Financial Wealth Shocks: Evidence from in Italy

We look at how strongly shocks to asset values affect labour supply, using Italian data. We use asset price shocks to provide a measure of wealth changes that is exogenous to households\u2019 saving and labour supply. Our results point to significant effects of wealth on hours of work and on whether or not agents leave their jobs. The magnitude of these effects can be substantial, for example for those individuals who suffered larger wealth losses during the financial crisis. Family effects reflect similar responses from men and women on average. Older working-age individuals drive the population results

Wealth Effects and the Consumption of Italian Households in the Great Recession

We estimate marginal propensities to consume from wealth shocks for Italian households in the early part of the Great Recession. Large asset price shocks in 2008 underpin an IV estimator. A euro fall in risky financial wealth resulted in cuts in annual total (non‐durable) consumption of 8.5‐9 (5.5‐5.7) cents. There is evidence of effects on food spending. Responses of total and nondurable spending to changes in housing wealth are 0.2 to 0.3 cents/euro. Point estimates of the effect of the financial wealth shock are larger if the youngest and/or oldest households are excluded. Results indicate that responses to the wealth shock were stronger for those who became pessimistic about the stock market, and for those owners of risky assets who also held mortgage debt. Counterfactuals indicate financial wealth effects were important (relative to other factors) for consumption falls in Italy in 2007/08

Labour supply responses to financial wealth shocks: evidence from Italy

We look at how strongly shocks to asset values affect labour supply, using Italian data. We use asset price shocks to provide a measure of wealth changes that is exogenous to households’ saving and labour supply. Our results point to significant effects of wealth on hours of work and on whether or not agents leave their jobs. The magnitude of these effects can be substantial, for example for those individuals who suffered larger wealth losses during the financial crisis. Family effects reflect similar responses from men and women on average. Older working-age individuals drive the population results

How do early-life conditions shape health age profiles late in life?

We investigate how health dynamics late in life vary with early-life conditions. Better early-life conditions are associated with better health outcomes. Education as well as current income and wealth are important mediating factors of this relationship

Retirement rigidities and the gap between effective and desired labour supply by older workers

Our paper analyses the observed and desired labour supply of older workers and (recent) retirees in a country (Italy) with limited opportunities for exible work schedules. For this purpose, we use a unique dataset drawn from the Bank of Italy's Survey on Household Income and Wealth (SHIW) providing information on both desired and actual working hours. Our empirical analysis documents the gap between older individuals' desired and observed labour supply at both the extensive and the intensive margins and traces it back to gender, education and family composition. The paper provides useful insights into the potential effectiveness of policies such as gradual retirement and part-time work in increasing older workers' employment