From Financial Literacy to Financial Capability: A Preliminary Study of Difference Generations in Informal Labor Market

Abstract

This study aims to investigate whether financial attitude links financial literacy to financial capability. To make sound financial decisions,‎one essentially requires a certain level of financial literacy – knowledge and skill in finance. Even more effective is when one's financial‎literacy could be developed into financial capability. The samples comprised 342 individuals from informal labor in the South of Thailand.‎The stratified multistage sampling technique was utilized to select the respondents, while the interview questionnaires were used to collect‎the data. By using SmartPLS 3.0, the data analysis included descriptive statistics and structural equation modeling (SEM). The result‎revealed that the one with the highest debt was Gen Y compared to Gen B and Gen X. Considering financial literacy, financial attitude,‎and financial capacity across generations, it was found that Gen Y had the highest average score in financial literacy and financial capacity,‎higher than that of Gen X and Gen B. The impact of financial literacy on financial capability through financial attitude, it was found that the‎impact on Gen B was higher than that of Gen X and Gen Y. With the right financial attitude, people of all generations would be equipped‎with a higher level of financial capability.