FINANCIAL EDUCATION, DEBT LITERACY AND CREDIT MARKET PARTICIPATION: THE CASE OF POLAND

Generally, financial market participation is considered a healthy and desired consumer behaviour. However, participation requires some degree of financial literacy. It is well recognised that more financially literate individuals are more likely to participate in markets for financial assets. Yet, the link between financial literacy and credit market participation is less studied and - due to the properties of debt - seems to be a more complex issue. We examined not only this link, but also the relation between financial education - both formal and informal - and debt literacy as well as credit market participation. To do so, we processed survey responses obtained in a nationally representative sample of Poles within a series of logistic regressions. We found that actual debt literacy was insignificant in explaining credit market participation, while self-assessed debt literacy was significantly and positively associated with participation. Although both formal and informal financial education were positively linked to higher debt literacy, only informal education turned out to be a significant predictor of credit market participation.