Financial Literacy and Preferences for Economic Openness in the UK

• In Event: Poster Session: International Political Economy I

Abstract

Recent events in Europe and the U.S. suggest that the liberal order is in crisis as nationalist, protectionist, and populist political entrepreneurs and their agendas are gaining significant ground across the Western world. This illiberal shift has impacted individual policy preferences on domestic and international economic issues. Many theories have been formulated as to which factors are more likely to explain such policy preferences. My hypothesis is that financial and economic literacy affect economic policy preferences. In this paper, I built a formal model that describes how financial and economic literacy affect policy preferences. To test the predictions of my theory I analyze data from the British Election Study and I use multinomial logit models to test the hypotheses on three contentious issues: Brexit, immigration, and views on 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 they are more likely to think that free trade with the EU and immigration are good for the British economy.

Author

• Beatrice Magistro