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1 – 2 of 2Raúl Armando Cardona-Montoya, Vivian Cruz and Samuel Arturo Mongrut
Our findings indicate that workers with more financial education were more prepared to face the negative effects on their finances from COVID. This ability reduces the probability…
Abstract
Purpose
Our findings indicate that workers with more financial education were more prepared to face the negative effects on their finances from COVID. This ability reduces the probability of becoming financially fragile and experiencing financial stress.
Design/methodology/approach
The authors applied a survey questionnaire to 856 Colombian adults and used principal component analysis to build an index for each factor. Then, the authors used a linear regression model with the indexes to test our hypotheses and verify our results using a structural equation model.
Findings
Our findings indicate that workers who have more financial education are more prepared to face the negative effects on their finances, which reduces the probability of becoming financially fragile and having financial stress.
Research limitations/implications
The authors found that there is no significant relationship between financial literacy and financial fragility, neither between financial literacy and financial stress, so a better financial education will not lower financial fragility and stress unless it is being applied by households through better financial preparedness.
Practical implications
It is important to highlight that the pandemic not only taught us to improve biosecurity measures but also that financial strength, ability to work remotely and income diversification were key factors in facing this adverse shock, the authors show that high levels of financial education have a positively relationship with the ability of individuals to manage their resources, so private and public institutions have to promote better financial education.
Originality/value
This is the first study that applies the four different indexes to an emerging country (i.e. Colombia), and the first one to create and use a financial stress index.
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Samuel Arturo Mongrut, Vivian Cruz and Daniela Pacussich
The purpose of this paper is to determine the impact of private and public initiatives (financial literacy, entrepreneurship, remote work and government aid) on individual job…
Abstract
Purpose
The purpose of this paper is to determine the impact of private and public initiatives (financial literacy, entrepreneurship, remote work and government aid) on individual job loss and decrease in income during the COVID-19 pandemic in Peru.
Design/methodology/approach
The authors used an unbalanced panel data analysis with the National Household Survey for 2019–2020. The hypotheses are tested with a probit panel data model since the dependent variables are binary.
Findings
The study findings indicate that financial preparedness reduced the probability of having a decrease in income, but only to informal workers in metropolitan Lima. Furthermore, entrepreneurship helped mainly female informal workers to reduce their probability of becoming unemployed in metropolitan Lima. Besides, the implementation of remote work as a substitute of face-to-face work was not enough to avoid the decrease in income in the case of informal workers and it was only effective to avoid unemployment in the case of formal workers in metropolitan Lima. Finally, public aid proved to be instrumental in mitigating the decrease in income, but only to informal workers in Metropolitan Lima.
Research limitations/implications
The study results only apply for the first year of the pandemic.
Practical implications
Policymakers should focus on increasing the financial preparedness of informal workers, especially in provinces.
Social implications
Policymakers must expand unemployment benefits, and design public aid programs targeting informal workers in provinces.
Originality/value
This is the first study that analyses the impact of private and public initiatives on the decrease in income and unemployment situation of Peruvian individuals during the outbreak of the COVID-19 pandemic.
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