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The influence of financial literacy on financial resilience – New evidence from Europe during the COVID-19 crisis

Diba Erdem (UCAM Catholic University of Murcia, Murcia, Spain)
Joachim Rojahn (ISF (Institute for Strategic Finance), FOM University of Applied Sciences for Economics and Management,Essen, Germany)

Managerial Finance

ISSN: 0307-4358

Article publication date: 24 May 2022

Issue publication date: 9 September 2022




This study examines the importance of financial literacy in explaining financial resilience in four continental European countries during the coronavirus disease 2019 (COVID-19) crisis while controlling for a wide set of additional determinants.


Variable importance may vary with the technique applied. Therefore, different classification techniques, such as logistic regression, partial proportional odds regression, and conditional random forest, have been employed. The analysis relies on the Survey of Health, Ageing and Retirement in Europe in the context of COVID-19, collecting 4,781 observations from France, Germany, Italy, and Spain.


In line with previous studies, financial resilience is found to increase with financial literacy that consistently ranks in the midfield in terms of variable importance among all explanatory variables.

Practical implications

The findings reveal the most important features that improve financial resilience. Financial literacy is one of the few determinants of financial resilience that can be actively shaped. To increase preparedness for future crises, a policy mix of financial education, regulation, and nudging may help increase financial literacy and, subsequently, financial resilience.


The better the financial literacy, the more protected individuals are from macroeconomic shocks. However, most previous studies do not rely on data samples that cover such crises. Moreover, most of the previous studies rely on single classification techniques, while this study applied traditional and data-mining techniques to assess feature importance.



Conflict of interest: The authors have no conflicts of interest to declare.

The authors thank the anonymous reviewer(s) for helpful comments on an earlier version of this paper.


Erdem, D. and Rojahn, J. (2022), "The influence of financial literacy on financial resilience – New evidence from Europe during the COVID-19 crisis", Managerial Finance, Vol. 48 No. 9/10, pp. 1453-1471.



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