On the link between financial literacy and financial well-being in times of economic stagnation: an integrated framework

Purpose The purpose of this paper is to propose a thorough framework to investigate and understand the key antecedents of financial literacy (FL) and how it contributes to indebtedness and financial well-being (WEL) in the context of a developing country (i.e. Morocco). The moderating effects of age, gender and education are also scrutinized using the partial least squares multi-group analysis (PLS-MGA). Design/methodology/approach Survey data from a sample of 848 respondents from Morocco were used to test the hypotheses using structural equation modeling. Findings First, financial socialization, financial knowledge, financial behavior, financial attitude and parental norms were all validated as key determinants of FL. Second, while FL was demonstrated to significantly improve individuals' WEL, it had no impact on individuals' indebtedness. Finally, the PLS-MGA emphasized a number of disparities among the different demographic groups of the sample, confirming the posited moderating effects of gender, age and education. Social implications The current research underscores important social implications, particularly in contexts marked by economic stagnation. First, our findings suggest that strengthening financial literacy and emphasizing behavioral aspects (e.g., budgeting, saving, and long-term planning) can help individuals better navigate economic uncertainty and maintain financial well-being. Second, tailored financial literacy programs can reduce social inequalities by addressing gender, age, and education differences in financial knowledge and behavior, ensuring that vulnerable groups receive the support they need. The signficant impact of parental norms also highlights the importance of equipping parents with tools for effective financial socialization, thereby fostering intergenerational financial awareness and resilience. These insights provide valuable guidance for policymakers and financial institutions to design inclusive, practical interventions that prevent financial distress, reduce social vulnerability, and promote long-term economic stability and financial well-being at both the individual and societal levels. Originality/value The current research bridges a gap in FL literature by offering a thorough understanding of the antecedents of FL and its impact on individuals' WEL in an emerging market context. It contributes to existing literature by offering a set of empirical generalizations related to FL in developing countries, where financial vulnerability is more prevalent. As well, the reflection of the moderating effects of gender, age and education emphasizes the necessity of using customized financial education programs that take into consideration the disparities among dissimilar demographic segments.