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The study aims to empirically analyze whether financial literacy can improve the financial behavior of individuals in the context of emerging markets like India.

The authors use the nationally representative Financial Inclusion Insights survey conducted in India during 2018 for the analysis. The authors consider the financial literacy score based on the standard financial literacy quiz that includes understanding basic numeracy, interest rates, inflation and diversification concepts to study its effect on payment attitude, savings attitude and risk management behavior proxied by insurance uptake. Using an instrumental variable approach, the authors account for the possible endogeneity associated with the financial literacy variable.

The authors find that less than 9% of individuals have correctly answered questions capturing all four aspects of financial literacy. The analysis suggests that improvements in financial literacy scores indeed increases the likelihood of exhibiting superior financial behavior. The results are robust to alternative definitions of financial literacy, outcome variables and inclusion of additional controls. The authors find that financial literacy increases financial planning, and this, in turn, possibly improves financial behavior. The effects are prominent for those residing in the urban area and having confidence in their financial skills.

This is among the few studies that provide insights regarding how improvements in financial literacy can improve financial behavior in an emerging economy context. Moreover, this study highlights financial planning as a possible channel through which financial literacy affects financial behavior. Further, the heterogeneous effects based on the area of residence and own ability underscore the need for complementary policies.

The study analyzes the relationship between homeownership and financial investment of households in the context of emerging markets like India. It also examines how homeownership affects the portfolio decisions of Indian households.

Using the nationally representative All-India Debt and Investment Survey of 2019 and employing an instrumental variable approach, the authors analyze the relationship between homeownership and the share of financial assets held by Indian households. The study also employs several sensitivity checks, including alternate estimation techniques and alternative definitions of the housing variables, and accounts for additional factors to ensure that the authors are able to capture the effect of homeownership on the outcome variable.

The analysis suggests homeownership crowds out financial investment in India due to high repair and maintenance costs. The negative effect is mainly observed in urban households. Further, the findings imply that homeownership leads households to reallocate their asset portfolio. Homeowners have a lower share in liquid short term deposits, indicating the high liquidity risk of their portfolios. On the other hand, homeownership increases the share of long term retirement funds along with no effect on risky asset share. The authors observe that the crowding out effect is more striking for younger households and poorer households with low income, and the effect is lower for indebted households.

The findings underscore the need for financial awareness programs so that housing does not crowd out liquid investments of households. Additionally, the results highlight that policies should first focus on young and poor households as the negative effect is more prominent for these groups. Finally, there is scope for policies to support repair and maintenance costs incurred by vulnerable households to reduce the negative effect of housing on liquid financial investments.

This paper is among the few studies that provide insights into how homeownership relates to financial investment and portfolio decisions in the context of an emerging economy. Furthermore, the heterogeneous effects based on poor economic status and age underscore the need for complementary policies.

Since the spread of mass education around the world in the mid- to late-twentieth century, teacher quality has been heralded as the key factor to improve education quality nationwide. National education systems worldwide are also engaged in ongoing and often high stakes cross-national comparisons. As a result, policy-makers and educators in most national education systems are looking at and implementing new ways to improve education overall by raising teacher quality levels, and India is no exception. In India, teacher quality is publicly blamed for both perceived low education quality and demonstrated low average student performance, especially following Indian students’ performance on the 2009 Programme for International Student Assessment. Indian education policy-makers are, therefore, looking at teacher quality as a key factor to improve student performance. Little is known about the impact or implementation of Indian policy frameworks on teacher quality and associated student outcomes in India. This introductory chapter identifies and analyzes various measures of teacher quality and how teacher quality varies in India both in response to and in spite of national policies related to teacher quality. It begins by providing evidence regarding the global importance of teacher quality on student outcomes and then addresses the ambiguity of the term “teacher quality.” This chapter then briefly discussed national education policy in India and the role teacher quality has played in these national policies, especially in the early twenty-first century, including NCF 2005, NCFTE 2009, Draft NPE 2016, Draft NPE 2019, and NPE 2020.