Professor Jerry Buckland is the CHASM International Visiting Fellow for 2023. Jerry is Professor of Economics in the Redekop School of Business at Canadian Mennonite University (CMU), and a Faculty Member in International Development Studies at the University of Winnipeg. His research and teaching examine the financial dimensions of human wellbeing. Jerry is running the final stages of a 6-year research project, the Canadian Financial Diaries, which is based at CMU’s Centre for Resilience.
CHASM International Visiting Fellowship research
Do skills in math/s better enable people to manage their money?
Jerry Buckland
In September and October 2023, I had the pleasure of spending six weeks at the University of Birmingham based at the Centre for Household Assets and Savings Management, CHASM. I was here as a part of the International Research Visiting Fellowship Scheme. It was a very rich time of meeting new colleagues, learning about their work, and learning about the activities of the Centre. CHASM is an impressive organization, doing very important work, and CHASM faculty and staff were incredibly friendly and made me feel at home. On top of engaging with people at the Centre I was able to participate in field research in Birmingham.
Starting out
The CHASM Fellowship gave me the opportunity to work with Dr Atkinson, Professor of Practice in Financial Literacy and Wellbeing, based at CHASM. Our plan was to dig into a topic related to my work with the Canadian Financial Diaries research project and directly linked to CHASM’s research themes. The diaries project includes the goal of understanding the financial dynamics of vulnerable people in a rapidly changing socio-economic context. This includes understanding the barriers and opportunities that they face in trying to improve their financial and overall well-being. CHASM’s themes are Wealth, assets, and inequality; Risk and financial wellbeing in later life; and, Poverty, precarity, saving, and debt.
Dr Atkinson and I began talking about a relevant topic in January 2023. We decided to focus on the role of numeracy in enabling financial literacy and money management for people with limited income. We chose this topic because it tied in very closely with the kind of work we were doing in the diaries project (i.e., learning how people practically manage their money) and is closely related to the second (since some of our participants are older) and third (since most of our participants have low and volatile income) CHASM themes.
We began the process by drafting a literature review and writing proposals for funding and the ethics review. The literature review has identified an important tension with respect to the role of numeracy in the financial literacy, particularly in relation to people with limited means. We found that five of the nine studies we looked at on this issue concluded that numeracy was not a critical factor, or that other factors were critical in determining financial literary (Cao-Alvira 2020, Carpena and Zia 2020, French and McKilop 2016, Hong et al. 2022, Sun et al. 2018). Three of these studies include numeracy as a factor to investigate (Cao-Alvira 2020, Carpena and Zia 2020, French and McKilop 2016) and two did not include numeracy (Hong et al. 2022, Sun et al. 2018). The research Dr Atkinson and I are planning seeks to address this tension in the academic literature. By direct qualitative interviewing and using the financial diaries to examine people’s financial literacy, their numeracy, and their access to financial services we plan to contribute to a clearer understanding of the numeracy-money management connection.
The field work in Birmingham
After a few challenges with the original research plan, we modified our activities, and had our first interviews on Wednesday 6 September. These interviews continued the next day and then we undertook follow-up interviews, with the same group of people, two weeks later. In total we completed twelve interviews with 6 participants. The interviews involved open-ended questions about numeracy, financial literacy, and money management.
Dr Atkinson organized all the field work. This involved scheduling interview times with the recruitment agency, doing follow-up communications with participants, and re-scheduling interviews that were missed. Dr Atkinson also organized interviews with key persons including a person from the England Illegal Money Lending Team (in Birmingham), The Money Charity, and the Money and Pension Services (MaPS) (the latter two meetings in London). (We also have a meeting arranged with colleagues at the Financial Consumer Agency of Canada, FCAC, a federal government organization that does similar work to the UK’s MaPS.)
In the research we were joined by Emily Harle, a PhD student from the Department of Social Work and Social Care, University of Birmingham. She is working as a Research Assistant at CHASM and agreed to help us out in our interviewing and transcribing. Emily contributed a lot to the process and was a very effective interviewer.
We learned many things through our interviews, we are still processing what we heard, and will continue to process and analyze the data. Some preliminary insights are that numeracy is important but not formal ‘school’-type math/s but informal ‘street’ or applied numeracy. Our participants often understated their ability in applied numeracy. We also saw how other skills (e.g., organizational, communications, problem-solving) might be more important, as important, or all necessary, for people to manage their money.
Connecting with colleagues in Canada
During the field work we (virtually) met with my colleagues in Winnipeg, working with the Canadian Financial Diaries research project at Canadian Mennonite University (where I am based). In that meeting we discussed the next and ‘Canadian’ portion of this project. Once I return to Canada, we plan to interview a similar number of Canadians using the same interview questions. Those participants will be purposively selected from our pool of 80 financial diarists (who we have met with for 6 to 12 months on a regular basis). We will select one-half of the respondents from diarists who maintained a ‘good quality’ diary (diary that is well organized, complete, without errors, or submission of bank statements that were well understood) and the other half of the respondents who submitted ‘poor quality’ diaries. The quality of the financial diaries of the Canadian participants will give us another vantage point on numeracy, financial literacy, and money management.
Once the field work is complete, we will code and then analyze the qualitative data. We will also assess the quality of the Canadian respondents’ financial diaries. Through these two sources of data, we will explore the relationship between numeracy, financial literacy, and money management. In the literature review we identified an important tension about if numeracy matters for people with low-income and we hope to speak to that tension. We plan write up our study results and hope that it can influence policy and practice to better support the numeracy skill needs of low-income people.
References Cited
Cao-Alvira, Jose J., Amalia Novoa-Hoyos, and Alexander Nunez-Torres. “On the Financial Literacy, Indebtedness, and Wealth of Colombian Households.” Review of Development Economics 25, no. 2 (May 2021): 978–93.
Carpena, Fenella, and Bilal Zia. “The Causal Mechanism of Financial Education: Evidence from Mediation Analysis.” Journal of Economic Behavior and Organization 177 (September 2020): 143–84. https://doi.org/10.1016/j.jebo.2020.05.001.
French, Declan, and Donal McKillop. “Financial Literacy and Over-Indebtedness in Low-Income Households.” International Review of Financial Analysis 48 (December 2016): 1–11. https://doi.org/10.1016/j.irfa.2016.08.004.
Hong, Philip Young P., Maria V. Wathen, Alanna J. Shin, Intae Yoon, and Jang Ho Park. “Psychological Self-Sufficiency and Financial Literacy among Low-Income Participants: An Empowerment-Based Approach to Financial Capability.” Journal of Family and Economic Issues 43, no. 4 (December 2022): 690–702. https://doi.org/10.1007/s10834-022-09865-w.
Sun, Sicong, and Yu-Chih Chen. “Is Financial Capability a Determinant of Health? Theory and Evidence.” Journal of Family and Economic Issues 43, no. 4 (December 2022): 744–55. https://doi.org/10.1007/s10834-022-09869-6.