Financial Literacy for Financial Resilience: Evidence From Cyprus During the Pandemic Period

45 Pages Posted: 3 Jan 2023

See all articles by Panayiotis C. Andreou

Panayiotis C. Andreou

Cyprus University of Technology

Sofia Anyfantaki

Bank of Greece

Adele Atkinson

University of Birmingham; Independent Consultant

Multiple version iconThere are 2 versions of this paper

Date Written: January 2, 2023

Abstract

This study takes Cyprus as a case country to examine the role of financial literacy for financial resilience in the pandemic period. Responses to the survey questions to assess the level of financial literacy show that in 2021 less than 4 out of 10 respondents had a good financial knowledge proficiency level. The results also show that more than 1 out of 3 Cypriots are financial fragile, i.e., would not have been able to cover an unexpected financial need within a month without borrowing or asking for financial help. Moreover, about 6 out of 10 did not have a rainy-day fund to cover three months living expenses in case of losing their main source of income. The proportions are higher for young, not employed, low-income and larger households, indicating that these subgroups were the least resilient. These findings suggest that many Cypriot households were ill-prepared to face the economic consequences of the COVID-19 pandemic. Most importantly, the findings indicate that financial knowledge proficiency appears as a strong antecedent of one’s proclivity of being financially resilient. An important policy implication of the study’s conclusions is that financial education could help households to improve their financial resilience and prepare for future shocks.

Keywords: financial literacy, financial resilience, financial fragility, rainy-day funds, COVID-19, personal finance, financial education

JEL Classification: G53, G51, D14, D91, G21

Suggested Citation

Andreou, Panayiotis C. and Anyfantaki, Sofia and Atkinson, Adele, Financial Literacy for Financial Resilience: Evidence From Cyprus During the Pandemic Period (January 2, 2023). Available at SSRN: https://ssrn.com/abstract=4316433 or http://dx.doi.org/10.2139/ssrn.4316433

Panayiotis C. Andreou (Contact Author)

Cyprus University of Technology ( email )

School Of Management and Economics
P.O. Box 50329
Lemesos, 3036
Cyprus

HOME PAGE: http://www.pandreou.com

Sofia Anyfantaki

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece

Adele Atkinson

University of Birmingham ( email )

Edgbaston, Birmingham B15 2TT
United Kingdom
07828976934 (Phone)

Independent Consultant ( email )

London
United Kingdom

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