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In an era of increasing financial vulnerability, people are not saving enough to either fund their future pension benefits or having precautionary savings. The authors propose that pension knowledge makes people increase their probability of having voluntary pension and banking savings.

The authors use the social protection survey in Chile, a unique set of panel data for affiliates in 2006 and 2009. First, the authors use clustering algorithms to find naturally occurring groupings in the level of pension knowledge. Second, the authors run a probit regression model for explaining the probability of having a voluntary pension and banking savings, using as determinants the level of pension knowledge and several control variables that are usually explored in the literature.

The authors find two clusters of pension knowledge in the Chilean pension system. In addition, the authors find that there is a positive correlation between high pension knowledge and good financial decision-making, as these people have voluntary retirement and banking savings.

As people who spend time planning accumulate more wealth, it is important to develop public policies that promote the advantages to know better about the benefits of having voluntary savings for the long-term horizon. Conscientious people are also more likely to have voluntary savings.

Policy programs to increase to be responsible can have positive effects on society's welfare.

Up to the authors’ knowledge, this is the first study that connects clustering algorithms and pension knowledge.

En una era de creciente vulnerabilidad financiera, las personas no están ahorrando lo suficiente para financiar sus futuras pensiones ni para tener ahorros precautorios. Proponemos que el conocimiento de las pensiones hace que las personas aumenten su probabilidad de tener ahorros voluntarios para pensiones y bancarios.

Usamos la Encuesta de Protección Social en Chile, una base única de datos de panel para afiliados en 2006 y 2009. En primer lugar, usamos algoritmos de clustering para encontrar agrupaciones naturales en cuanto a nivel de conocimiento sobre pensiones. En segundo lugar, usamos un modelo de regresión probit para explicar la probabilidad de tener ahorros voluntarios para pensión y bancarios, utilizando como determinantes el nivel de conocimiento sobre pensiones y variables de control.

Encontramos dos grupos de conocimiento sobre pensiones en el sistema de pensiones chileno. Además, encontramos que existe una correlación positiva entre un alto conocimiento de las pensiones y tener ahorros voluntarios.

A medida que las personas dedican tiempo a planificar acumulan más riqueza, por lo que es importante desarrollar políticas públicas que promuevan las ventajas para conocer mejor los beneficios de contar con ahorros voluntarios para un horizonte de largo plazo.

Los programas de políticas para aumentar la responsabilidad pueden tener efectos positivos en el bienestar de la sociedad.

Este es el primer estudio que conecta algoritmos de agrupación en clústeres para el conocimiento de las pensiones y sus implicaciones en la toma de decisiones financieras.

Every citizen can be financially and economically active in certain circumstances if he or she has competencies, such as financial literacy. Current academic research suggests that financial literacy may be more important than income level and professional qualifications, as the decisive factor in the future will not be the amount of financial resources available to a person but the ability to manage them effectively and achieve their goals. Financial literacy competencies help different social groups to achieve private financial stability, acquire skills such as private financial planning, savings (including the third pillar of pensions), and their diversification, private capital multiplication, and openness to new business initiatives. The study aims to find out how financial literacy has developed in Estonia, Latvia, and Lithuania. Particular attention is paid to factors influencing the level of financial literacy. Research methods used are analysis of scientific publications and previously conducted research, analysis of surveys’ data on financial literacy and their factors, comparative time-scale analysis using regression trendline calculations of Estonia, Latvia, and Lithuania. The research results proved the impact and interconnection of main financial inclusion aspects such as account ownership, use of the Internet, availability of ATMs, and bank offices on financial literacy level. The main factor influencing the demand side of financial services is numeracy knowledge; a strong correlation has been found between PISA mathematics average scores for countries and their literacy level. The analyzed savings factor (voluntary savings for pension, life insurance, and investments in mutual funds) showed a heterogeneous situation – the ranks of countries differed from the financial literacy levels. It draws the attention of government policy-makers to attract citizens to these long-term investment and social security products by strengthening the supply side of the financial services.

Of all the various interventions into the market economy, which have been invented and implemented by man and state, those that historically have caused the gravest consequences in the advanced industrialized economies surely are the inflationist policies, which lead inexorably to the business cycle in all of its various aspects and manifestations. In this paper, we shall attempt to trace through a number of socio-economic consequences and implications of the business cycle. We are convinced that ultimately the business cycle has political implications, which are just as far reaching and grave as its numerous economic consequences.

Small firms in developing countries continue to experience difficulties in accessing finance from formal financial institutions. This paper argues that regulating microfinance operations and activities is likely to strengthen microfinance institutions’ (MFIs) financial sustainability. This in turn could provide an important source of finance to small firms. Using the case of the microfinance industry in Tanzania, the paper aims at moving the microfinance regulation debate forward by generating a number of relevant inputs towards the formulation of a regulatory framework. This contribution probably comes at an opportune moment when the Tanzanian government is in the process of formulating a framework to regulate and supervise microfinance institutions.

The purpose of this paper is to find the factors that affect the “performance” of microfinancing institutions (MFIs) around the world and to further analyse the interaction and higher order effects of these factors on the performance. Although MFIs can have various objectives from a commercial focus to a social focus when performing their operations, this study analyses the factors that contribute to “performance” of MFIs in relation to their ability to “alleviate poverty in a sustainable manner”.

Based on the data relating to 234 MFIs across 63 countries, this study analyses eight factors that can affect performance of MFIs (as defined in this study) and their higher order and interaction effects using multiple regression models.

The results show that gender (female), literacy level of the borrowers, operational efficiency, offering only loans (not diversifying), age and emphasis on profitability have a significant effect on the performance. Analysis of higher order effects shows that the relationship of age with performance is a downward concave curve and that with operational efficiency is an upward concave curve. The interaction effects of gender and literacy, age and emphasis on female borrowers, and also age and emphasis on profitability were found to be significant.k

The findings contribute to understanding the factors that affect the performance of MFIs to alleviate poverty in a sustainable manner and help the policy makers and managers of MFIs to improve their performance in this area. Considering the hundreds of millions of dollars injected into microfinancing, improvement in performance as a result of these findings can lead to savings in millions of dollars.

In France, a religious congregation created the first ethical fund in 1983. By the end of the 1980s, only two ethical funds were operating. During the second half of the 1990s, the number of SRI funds rose rapidly – only 7 were available in 1997, by December 2001 this number had jumped to 42 and then to 137 by the end of 2007. In 2010, almost 300 SR funds were available. During the period from end of 2001 to end of 2010, the percentage of total French mutual fund capitalization represented by SRI funds climbed from 0.12% to nearly 1% (www.novethic.fr). Despite the fact that this total amount remains modest, still all retail networks are now offering such funds.

The purpose of this study is to find out the effect of consumption tax on savings behavior especially on the people who are close to their retirement.

The authors analyze the response in spending and retirement saving using a difference-in-differences regression methodology. The authors use the year since the Public Provident Fund (PPF) enrollment date for each individual as a random assignment to identify the service tax policy's causal impact. Therefore, this variable is a continuous variable defined as an individual's age until the end of the restrictions when people can withdraw money from their retirement savings account PPF without any penalty. The treatment variable is the service tax shock (increase in service tax) that happened effective 1st April 2015.

The authors find a significant effect of a change in the service tax rate on individuals' spending and PPF saving behavior. On average, individuals lower their consumption by about 14% and increase their PPF savings by 16% in response to the increase in the service tax rate. The authors find substantial heterogeneity in effect across different types of individuals. The effect is more pronounced for people closer to their retirement and needy people (defined as individuals with low traditional savings account balances).

The authors studied the effect of consumption tax on one category of savings (PPF) only. There are other savings instruments available in India. The data for those were not available to us.

This paper not only throws light on the consumption and savings behaviour of the individuals, but will also help the policy maker for framing appropriate fiscal policy.

Using a unique and proprietary data from a large bank in India, the authors analyze the effect of a tax policy change on households' consumption and retirement savings behavior. The authors find that households reduce their consumption by 14% and increase their voluntary retirement savings (Public Provident Fund aka PPF) by 16% in response to an increase in the service tax policy. Individuals close to their retirement age (55 years of age and above) and without any withdrawal restrictions from their PPF account tend to reduce their expenditures more and save more. Individuals with financial constraints and withdrawal restrictions do not reduce their expenditures significantly. To the best of the authors’ knowledge no study was done on this.

The authors herein carry out a literature review of retirement planning and highlights that proper retirement planning starts by looking at the level of income an individual is likely to continue receiving at retirement if they were to take no action, then comparing this to what they would need to lead the lifestyle they desire. The authors review the traditional economic theories that many are accustomed to when interpreting financial matters (i.e., rational behavior) and compares this to the various studies and articles found in literature. The authors then dig into retirement planning in Malta and the behavioral obstacles to proper planning and how these are tackled in different European countries.

The market for solidarity employee savings remains under most people's radar in France, but targeting a new audience of employee savers it has progressed steadily in recent years. The solidarity employee savings works on the same mechanisms of employee savings ‘classic’, while allowing employees, through a part of their investments, to help solidarity activities. Since 1 January 2010, it is mandatory that French employees be offered a solidarity savings fund in which they can invest assorted company savings plans (French acronym ‘PEE’ for plans épargne entreprise) or group retirement savings plans (French acronym ‘PERCO’ for plan épargne retraite collective). In this way, French legislators have created a wealth of around 12.3 million employees in solidarity employee savings, hence the value of understanding this emerging phenomenon and ascertaining its compatibility with employee savings.