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The 3rd International Conference on Management in Emerging Markets
Influence of Fathers Attribute to the Financial Literacy of their
James Christopher Santosoa
, Ahmad Danu Prasetyob
a,bSchool of Business and Management ITB, Jl. Ganesha no. 10, Bandung 40132, Indonesia
There are some father’s attributes that might influence his child’s Financial Literacy, among others Father-Child Age Gap, Father’s
Income Level, Father’s Education Level, Father’s Job Type. Financial Education Course also becomes the independent variable as
another factor that might influence the Financial Literacy. This research helps proving which factor is more significantly influencing
the children’s Financial Literacy, between the father’s attributes and financial education course. As to collect data, a questionnaire
survey is conducted to 204 respondents of university students in four universities in northern Bandung area. The questionnaire
contains demographic questions of the respondent’s father and the question asking financial education course that has been taken
by the respondent, as well as a set of questions for measuring the respondent’s financial literacy level. After the data has been
collected, a multiple linear regression is conducted to analyze the data. The result shows that Father’s Income Level and the child’s
Financial Education Course are significantly influencing the child’s Financial Literacy, with Financial Education Course that has
the strongest significance. Thus, the most determinant factors to the Financial Literacy are Financial Education Course and Father’s
Keywords: Financial Literacy; Age Gap; Income Level; Education Level; Job Type; Financial Education; Multiple Linear Regression
The first social group for a child is normally built at his/her family, where a child builds up their mindset before
being influenced by other social groups. It is studied that fathers have a profound impact on their children’s intellect
growth at a very early age (Gadsden & Ray, 2003). According to this research, the education from the father is quite
strong in building the child’s literacy. In addition, a crucial review of the research on father’s involvement in children’s
education, found out that father’s participation in literacy activities, the barriers that parents face as a result of low
literacy, and their perceptions of role that they can play in their children’s literacy development, may affect children’s
preparedness for school (Gadsden & Bowman, 1999). That is why the root of children’s education and literacy are lied
on the father’s affluence, even before the children go to school. Furthermore, although mothers’ education historically
has been used as a primary as the predictor of children’s literacy, educational research increasingly is examining the
effect of father-child interaction on children’s learning (Gadsden, Books, Jackson, 1997). Besides, not only referring
to literacy in general, Grohmann et al. (2014) have shown that parental socialization by father plays a major role in
financial literacy. Thus, a child tends to carry money management skills that would determine one’s financial decision
making in every event that happens in the future of the one’s lifetime, or in other words financial literacy, from the
father’s affluence in their childhood into their adult lives (Furnham, 1996; Kirkcaldy & Furnham, 1993; Colcagno &
Based on the above literatures, there are some potential factors identified in the father’s attributes that might
influencing one’s literacy, especially for the financial aspect. The first attributes is regarding the “Father-Child Age
Gap”. This particular factor is identified as that the age gap between father & children is strongly related to the
Generation Gap in which making a difference in life experience and values of each generation (Phillips, 2011). Having
* Corresponding author.
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a gap of generation leads to the different perspective & mindset, including the financial management, selected
investment management, financial protection management, financial legacy management and so forth (Ćumurović &
Hyll, 2016). Thus, it is an interesting part to find out the result from the survey. The next attributes to be taken into
consideration are the Father’s Income Level, Father’s Education Level, and Father’s Job Type as referred and
highlighted by Kiyosaki & Lechter (2001) which categorize fathers into two different characteristics so called “Rich
Dad” and “Poor Dad” and both characteristics influences their children’s financial literacy differently.
Father’s Income Level refers to the size of the income either directly or indirectly derived from the business
/work/investment of the father. Thus, the higher of the father’s income will affect their children education including
but not limited to the financial literacy as there will be a flexibility for their children to access quality educations
besides the children might learn directly from their fathers from the beginning on how to properly manage their
financial. The so called “Rich Dad” as referred by Kiyosaki & Lechter (2001) are Fathers who have high
income level. Hence, this view will be tested through a series of survey which the author will perform later on.
Father’s Education Level is associated with the degree of the education attended by the father being their
background before/during their career. In theory, the higher of the father’s education level the wider of insight from
the father which in turn will be adopted by their children in higher education including improving their financial
literacy (Lantara & Kartini, 2015, Gadsden & Ray, 2003). However higher education level does not necessarily mean
that the father is categorized as “Rich Dad”. Therefore, it also becomes an interesting part to test the above view.
Lastly about the Fathers’ Job Type which refers to what kind of job engaged by the father. Generally the job type
is classified into 2 main parts, i.e. Left Cash Flow Quadrant (Employee & Self-employed) and Right Cash Flow
Quadrant (Business Owner & Investor) in which the job type in the left side requires the role and presence of the
fathers at all time to do their job, whereas the job type in the right side does not necessarily require the role and presence
of the fathers to do their job. Normally the job type of the right side will have more opportunity to get a “fast lane” to
achieve wealth and independent income sources compare to the left side job as referred by Kiyosaki & Lechter (2001).
No matter the job type of a father will become an inspiration to their children in performing their career and opening
their mindset of a job type which suitable for them. Therefore, the author conducts this research to proof if this view
is really applied to the society in general.
Meanwhile, one’s financial literacy is also inseparable with the child’s own financial education, as it is being
measured by the components of education about finance, among others: the understanding of Compound interest I,
Compound interest II, Inflation, and Money Illusion, Volatility, Risk diversification, Stock market, Balanced fund,
and Bond prices (Boersch-Supan, 2009). But the previous study found differently, that financial education course is
not significantly influencing one’s financial literacy, as there was virtually no difference in financial literacy score
between those who had taken the course and those who had not (Mandell & Klein, 2009). Thus, not only the father’s
attributes but financial education course of the child also becomes the independent variable of this research, so that it
could be proved which of the variables is the most significantly influencing towards one’s financial literacy.
An interesting thing about financial literacy is that financial literacy is positively and significantly associated with
the total net worth, hence having higher financial literacy level is having a higher level of net worth (Behrman, et al.,
2012). It is caused by the likelihood to make a proper financial decision if one is financially literate (Colcagno &
Monticone, 2011; Beal & Dealpachtra, 2003), and it is irreplaceably needed, not even by financial advice (Colcagno
& Montecone, 2011).
When it comes to the financial literacy level in Indonesia, the number is 32%, which is still below the world average
of 37% (Klapper, et al., 2014). This indicates that most Indonesian is likely to make a poor financial decision. If only
Indonesian become more financially literate, Indonesian society would have become wealthier than today.
While this research is proving the significance of father’s attributes and financial education course influence to
financial literacy, it helps to find out which factor is determining the financial literacy level the most. It is contributing
benefit of reference from the perspective of father’s attributes and financial education course, for everyone or every
institution that makes a plan to increase the financial literacy level of society, to aim accurately which factor to be
developed. Especially the financial literacy level of university students, needs to be developed because this generation
is the one who will be on their productive age during Indonesian bonus demographic, which is predicted to happen in
2045 (CNBC Indonesia, 2018). By becoming financially literate, this generation would be able to cumulate net worth
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better, hence makes Indonesia society become wealthier (Behrman, et al., 2012). It also explains why the samples of
this research are university students.
Otoritas Jasa Keuangan (OJK) (2013) defines that financial literacy is series of processes or activities for increase
knowledge, skill, and faith (confidence) consumers and society so they are able to manage personal finance in a better
way. Unfortunately, Indonesian still have a financial literacy level 32%, which is below the financial literacy average
within the countries around the world, which is 37% (Klapper, et al., 2014). However, financial literacy or money
management skills is carried from the childhood, which is strongly affected by father’s affluence (Gradsden &
Bowman, 1999; Furnham, 1996; Kirkcaldy & Furnham, 1993; Colcagno & Monticone, 2011).
Father’s Income Level
Mandell (2008) found that there tended to be a positive correlation between financial literacy according to
household income level. Students from lower income level households scored lower on the financial literacy exam
than students in higher income level households, while a student from higher income household possessed the higher
level of financial literacy (Moten Jr., 2011; Mandell, 2018).
Father’s Education Level
Parental education is strongly influencing the child’s mental, which is even stronger than the effect of other
associated variables, such as family income and social class (Sonego, et al., 2012). When it comes to the financial
literacy, it is found that head of family’s education has no significant relationship (Febriana, 2016).
Father’s Job Type
Kiyosaki & Lecther (1999) classifies job type into four based on how a person earns income, which is defined as
Cash Flow Quadrant: employee (E), self-employed (S), businessman (B), investor (I). Cash Flow Quadrant represents
a couple of differed methods, based on where the income is earned. For instance, “E” people earn money from having
a job and work for another person or a corporate. “S” people earn money from working for themselves. “B” people
own company which generates money, while “I” people earn money from their investments in other words, money
generates more money.
Financial Education Course
A comparison of those who had and did not take a financial education course does not demonstrate a meaningful
positive impact for those taking the course. Mandell & Klein (2009) conducted a research that finds evident in several
different measures. After several years, those who took the course were no financially literate than those who did not
take the course. The average personal financial literacy score, among the respondents on the questions, was 69.3%. It
is found that there was virtually no difference between those who had taken the course and those who had not. Students
who had taken the course averaged a score of 68.7% and those who had not averaged a score of 69.9% (Mandell &
To collect data for this research, the author is using the quantitative method. The kind of survey that will be
conducted is in a form of a questionnaire. The respondents are taken from 4 universities, which are Institut Teknologi
Bandung, Universitas Parahyangan, Universitas Padjadjaran, and Universitas Kristen Maranatha. The samples of the
survey selected using random sampling, that involves 100 university students domiciled in northern Bandung,
Indonesia as the samples of the survey, out of 64,327 population (SRV2 PDDIKTI, 2016/2017). The number of sample
size taken is based on Slovin’s formula with the Precision (e) of 10%.
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The questionnaire includes a test of financial literacy which adopted 9 questions from 2009 SAVE survey, which
are related to basic numeracy and more advanced concepts of financial knowledge (Boersch-Supan et al., 2009), with
some changes are conducted as the currency in the original questions are in US Dollar, while the respondent is being
taken in Bandung, Indonesia, so they are being converted into Indonesian Rupiah. The questions related to financial
literacy included knowledge about the compound interest I, Compound interest II, Inflation, Money Illusion, Volatility,
Risk diversification, Stock market, Balanced fund, and Bond prices. The questionnaire also includes the questions
about the demographic factor of the respondent’s father, i.e.: Father-child Age Gap, Father’s Income Level, Father’s
Education Level, and the Father’s Job Type. There is also one control variable which is being excluded from the
father’s attributes but included into one of the independent variable, which is The Child’s Financial Education Course.
Table 1. Operational Variable
Father’s Income level
< Rp 4,500,000
Rp 4,500,000 – Rp 49,999,999
Rp 50,000,000 – Rp 249,999,999
Father’s Education Level
Father’s Job Type
The Child’s Financial
Less than 20 hours
20 – 40 hours
40 – 60 hours
More than 60 hours
To analyze the data, this research uses multiple linear regression method in SPSS software. Thus, the collected data
is tested using normality test, multicollinearity test, and heteroscedasticity test. By using the Multiple Linear
Regression method, after the variables are implied into the equation, then the equation becomes:
𝐹𝑖𝑛𝑙𝑖𝑡= + Agegap + Income + Education + 1 Employee + 2 Selfemployed
+ 3 Businessman + 4 Investor + Class + 𝑒
Before running multiple linear regression, normality test is needed to make sure that the data set is well-modeled
by a normal distribution and to compute how likely it is for a random variable underlying the data set to be normally
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Table 2. Normality Test
One-Sample Kolmogorov-Smirnov Test
Most Extreme Differences
Asymp. Sig. (2-tailed)
a. Test distribution is Normal.
b. Calculated from data.
c. Lilliefors Significance Correction.
Table 2 displays that the Kolmogornov Smirnov’s Z score is 0.100, greater than 0.05. Moreover, it has been stated
below the table by SPSS software that the data distribution is normal. Therefore, it is concluded that the data
distribution is normal.
Before running multiple linear regression, multicollinearity test is needed to make sure that every independent
variable is independent towards other independent variables.
Table 3. Multicollinearity Test
a. Dependent Variable: Finlit
On Table 3, it is displayed that the VIF of each independent variable is less than 10. Therefore, it is concluded that
there is no multicollinearity in every independent variable.
Before running multiple linear regression, multicollinearity test is needed to describe the case where the variance
of errors or the model is not the same for all observations, while often one of the basic assumptions in modeling is that
the variances are homogeneous and that the errors of the model are identically distributed.
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Fig. 1. Breusch Pagan’s Test
On Figure 1, it is displayed that the Breusch Pagan’s p-value is 0.058. Therefore, it is concluded that there is no
heteroscedasticity in the data.
Multiple Linear Regression
To analyze the relationship between the independent variable, which consists of Father-child Age Gap, Father’s
Income Level, Father’s Education Level, Father’s Job Type, and the child’s Financial Education Course
simultaneously towards dependent variable which is the child’ Financial Literacy, this research uses multi correlation
analysis (R Square).
Table 4. R Square
Adjusted R Square
Std. Error of the
a. Predictors: (Constant), Investor, Education, Class, Selfemployed, Agegap, Income,
Table 4 shows that the coefficient of determination (R Square) is 0.246 for the examined regression line could
significantly account for 24.6% of the total variable in the financial literacy. Meanwhile, 84% of the variations of
financial literacy could be presented by other variables that could be examined in other research.
Table 5. Multiple Linear Regression
a. Dependent Variable: Finlit
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Table 5 examines which of five variables will influence the most in financial literacy among the respondents and
respondents’ fathers. It is concluded that there are two independent variables that are significantly influencing financial
1. “Class” (the child’s Financial Education Course) has the strongest predictor to financial literacy among all the
variables, while Financial Education Course is the most significant variable that influences Financial Literacy,
with the p-value of 0.000, which is less than 0.05. Thus, H0 is rejected. It means that financial education course
significantly influences financial literacy. An increase of one point in financial education course will cause an
increase of 0.945 points in financial literacy.
On the previous study, Mandell & Klein (2009) found that financial education course does not have any impact
on the financial literacy, as both financially educated students and non-financially educated students scored
similar score on the financial literacy test. On the other hand, based on the research, financial education course is
the most significant variable that is related to the financial literacy. Financial literacy is being measured by the
understanding of Compound interest I, Compound interest II, Inflation, and Money Illusion, Volatility, Risk
diversification, Stock market, Balanced fund, and Bond prices (Boersch-Supan et al., 2009). From author’s
experience of attending financial education course, these subjects are the basic financial knowledge that is being
taught in most financial education course. That is why, the longer one attends a financial education course, the
more financially literate he/she is. No matter how much the father-child age gap is, father’s education level is,
father’s job type is, if the child is financially educated, they tend to be more financially literate.
2. “Income” (Father’s Income Level) has the second strongest predictor to financial literacy among all the variables,
with the p-value of 0.021, which is less than 0.05. Thus, H0 is rejected. It means that father-child age gap
significantly influences financial literacy. An increase of one point in father’s income level will cause an increase
of 0.474 points in financial literacy.
According to the previous research conducted by Mandell (2008), there tended to be a positive correlation
between financial literacy according to income level. On that research, a student from higher income level
households scored higher on the financial literacy exam than students in higher income level households, thus a
student from higher income household possessed the higher level of financial literacy (Mandell, 2008). It is quite
relevant to the research result, that father’s income level and financial literacy are positively correlated. It could
be implied that the higher father’s income level of the father, the more financially literate the child is. From
author’s point of view, income does not only come from salary, but it could be passive income and also capital
gain income. The higher income level of the father, the more he is able to cumulate net worth, meaning that he is
financially literate (Behrman, et al, 2012). Thus, the father could become an example or model for his child in
their financial literacy. Besides, author also sees that the higher income level of the father, the more capable the
father to finance the fee for a financial education class, the more the child has an opportunity to attend financial
This research is proving the significance of father’s attributes and financial education course influence to financial
literacy, it helps to find out which factor is determining the financial literacy level the most. The research itself is
conducted using the quantitative method, and the kind of survey being used is a questionnaire. The sampling method
for the questionnaire is random sampling, while the sample sizing is determined by using Slovin’s formula with the
Precision (e) of 10%, thus from 64,327 number of population, 100 samples are taken. By conducting a questionnaire
survey that measures the respondents’ financial literacy based on 2009 SAVE survey method and questioning the
respondents’ father’s attributes: age gap with the child, income level, education level, job type, with an additional
control variable of financial education course. Overall, the research shows that the significant factors are financial
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education course and father’s income level, while father-child age gap, father’s education level and father’s job type
are not significantly influencing financial literacy.
Based on the research, here are some recommendations provided by the author:
Since financial education course and father’s income level are the significant variables with positive
correlation, author recommends making financial education course a mandatory course for every major, and
to every father to become a good example or role model of a financially literate person to the children. Thus,
the children become surrounded by environment that brings positive influence on their financial literacy, both
in educational institutions and family. Therefore, Indonesian society in the future, especially during bonus
demographic era, to become a well financially literate society, so that they could make a proper financial
decision, avoid financial mistakes, and become a wealthier society.
For the future research, the author suggests conducting this research in a wider scope of a region and more
diverse respondent. As the coefficient of determination (R Square) of this research regression is only 24.6%,
the future research is encouraged to study more various of father’s attributes that might influence the child’s
financial literacy. Future researches can also conduct the study on mother’s attributes, as the parents’ influence
towards the child could also come from the mother’s influence.
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