“Financial literacy and preferences for economic openness in the U.K.”

by Beatrice Magistro; CeRP WP n. 193/19

Recent events in Europe and the United States suggest that the liberal order is increasingly
under stress as nationalist, protectionist, and populist political entrepreneurs are gaining significant ground across the Western world. Many theories have been formulated as to which factors
are more likely to explain such policy preferences. The hypothesis tested in this paper is that
financial literacy affects economic policy preferences. I analyze data from the British Election
Study and test my theory on three contentious issues: Brexit, immigration, and trade. Findings
suggest that financial literacy does affect economic policy preferences. Financially literate
individuals, regardless of economic self-interest, are more likely to vote remain in the Brexit
referendum, and to think that free trade and immigration are good for the British economy.

Published: September 2019