Advancing Financial Capability in a Global Context
Financial capability, the combination of financial knowledge and skills and access to appropriate financial products and services, is vitally important for individuals and families to act in their best financial interest through optimal financial functioning. Although financial knowledge and skills are a key element, low levels of financial literacy worldwide paired with an increasingly complex set of financial choices significantly impair people’s ability to make sound financial decisions. Financial access, a second key element, is the focus of practice efforts worldwide to promote financial capability, especially for the working poor. The lack of quality, affordable saving and investment mechanisms hampers efforts to promote financial capability (Sherraden, 2013); non-profits, NGOs and for-profit companies in the US and worldwide are engaged in developing and promoting financial access. Research is underway to learn more about the financial capability needs of diverse populations domestically and globally to better target efforts.
This symposium will provide a theoretical foundation for and empirical evidence about financial capability in a global context and about specific populations. Specifically, the presentations will focus on key questions to inform practice and research approaches to financial capability in a global context. The first paper from Birkenmaier and Huang proposes a theory-based framework that brings together previous research on financial capability to provide a common basis for research and practice worldwide. The proposed framework is particularly important for future studies to provide consistency for comparison studies, and contribute to the goals of policy makers and practitioners for which reliable research outcomes are needed. The second paper from Despard and Chowa provides empirical evidence about financial capability efforts with youth in Ghana, Africa. Their findings about the importance of earned income and parental discussion with youth in Ghana provide support for the exploration of these elements in financial capability efforts with youth worldwide. The third paper from Huang, Nam, and Lee provides guidance on financial capability efforts with older adult Asian immigrant populations. The researchers found that access and functioning are negatively associated with economic hardship. These findings underscore the need for financial capability efforts with older adult Asian immigrant populations to particularly focus on financial access and financial functioning. Taken together, these papers suggest ways that global financial capability research and practice efforts can progress.