Does financial literacy increase students’ perceived value of schooling?

Using data from the 2012 Programme for International Student Assessment (PISA) for Italy, this paper investigates whether financial literacy skills play a role in shaping the value that high school students place on schooling. I hypothesize that higher financial literacy may foster students’ awareness of the financial and non-financial benefits of gaining additional education, together with the costs associated with poor school outcomes. Results from OLS and IV estimates suggest that higher financial literacy increases students’ perceived value of schooling by boosting their time commitment to education. Conversely, there is no evidence that financial literacy shapes students’ attitudes towards school.