Working Paper

Financial Literacy and Its Consequences in the Emerging Middle Class

Kiel Working Papers, 1943

This paper analyzes the state and impact of financial literacy in a so far largely

neglected group: the middle class in emerging economies. This group is of increasing

importance for implementing structural change, including the proper use of

sophisticated financial products. We survey middle class people living in Bangkok

and find that higher financial literacy leads to an increased probability of

individuals demanding the sophisticated financial products that are available, and

more informed use of credit cards. Overall, improving the financial literacy of the

emerging middle class provides a double dividend: it increases the welfare of this

group and also contributes to financial development, which is a driver of growth.


Antonia Grohmann
Lukas Menkhoff
Roy Kouwenberg


Publication Date
JEL Classification
D14, G11, G14