The Relationships Between Income, Academic Education, and Financial Literacy: The Case of the Ultra-Orthodox in Israel

This research examines Financial Literacy (FL) among the ultra-Orthodox (Haredi) Jewish population in Israel, a group characterized by a high rate of poverty compared to others (Endeweld, Barkali, Gottlieb, & Heller, 2016b). FL has the potential to reduce the rate of poverty of the ultra-Orthodox population in Israel.

It analyses the relationships among income, education and FL, while controlling for background variables (e.g., internet connection and parental education). To this end, 187 Haredi households in Israel were surveyed. The questionnaires were analyzed using six multiple linear regression models and one logistic regression model. Major findings point to a positive relationship between income and FL, with higher income related to high FL. Moreover, this positive relationship between income and FL is moderated by the acquisition of higher education. In other words, individuals with low income who have acquired higher education will have higher FL compared to their counterparts with a lower level of education.

Our findings imply that there is a need to develop a policy of inclusion of ultra-Orthodox students at higher education institutions. A higher level of education increases the level of FL, which in turn might also reduce the poverty rate.