Approximately a quarter of families in Curaçao had an income below the poverty line in 2011 (CBS, Census 2011). Poverty is especially relevant for retirees, the unemployed, female parented single families, and the lowly educated. Evidence from other countries suggests that such households make unsound financial decisions. For instance they more often take out high interest loans and they don’t financially prepare for retirement. This is problematic because public pension (AOW) and social insurance schemes have become less generous in Curaçao.
Rob Alessie, Professor Micro-econometrics at the Faculty of Economics and Business, was awarded a NWO research grant of 600.000 Euros for the project ‘Improvement of the health - and financial literacy of the population of Curaçao’. The aim of the Groningen part of this project is to gain insight into how to improve financial literacy and to study the effects of financial literacy on financial decisions of residents of Curaçao.
‘Governments are basically encouraging increased reliance on the individual. But how well-equipped are individuals to make complex financial decisions in the face of often high-cost and complex financial instruments?’, says Alessie. ‘What is their level of financial literacy and who knows the most and the least? What are the consequences and costs of financial illiteracy? And what are the most effective programs to promote financial literacy and informed financial decision-making?’
Contact: Rob Alessie
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