Abstract:
Financial literacy has been widely proved to be related with various individual financial behavior and people with higher level of financial literacy tend to behave better in financial markets. In this paper, using income transition matrix and Probit model, we look at how financial literacy will eventually work on micro income mobility. Our results show that families with higher level of financial literacy possess higher probability of upward income mobility. As our daily life tends to get more and more involved with the capital markets, our findings provide a brand-new but promising angle for micro income mobility research.
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