ISSN: 2225-8329
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This paper examines the determinants of saving behavior, with a focus on the individual and joint effects of financial literacy and digital literacy, using individual-level microdata from the Global Financial Inclusion Database (Global Findex) 2021, a nationally representative dataset covering 143,887 adults across 139 economies. Since the Global Findex 2021 does not include direct knowledge assessments, both constructs are operationalized through composite behavioral engagement indices constructed from indicators of active financial and digital system participation, following the proxy-based approach validated by Grohmann et al. (2018) and Morgan and Trinh (2019). These indices capture the observable, behavioral expression of financial and digital literacy as theorized in the literature. Using survey-weighted binary logistic regression models that incorporate probability weights to ensure national representativeness, the results show that both financial literacy, as proxied by financial behavioral engagement (? = 0.762, p < 0.001), and digital literacy, as proxied by digital behavioral engagement (? = 0.870, p < 0.001), significantly increase the probability of saving, with effects robust across four distinct saving outcomes, namely general, formal, retirement, and informal saving. Notably, financial behavioral engagement exerts its strongest effect on formal institutional saving (? = 2.383, p < 0.001), while digital behavioral engagement emerges as the dominant predictor in Sub-Saharan Africa (? = 1.107), the only region where it surpasses financial behavioral engagement. An interaction analysis reveals a partial substitution effect between the two constructs (? = -0.345, p < 0.001), suggesting diminishing marginal returns when both competencies are present simultaneously. Regional heterogeneity analysis across seven World Bank geographic regions further reveals substantial variation in the relative importance of financial versus digital literacy. These findings contribute novel cross-country evidence to the financial literacy-saving nexus and carry important implications for the design of financial inclusion and digital education policies.
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