FROM KNOWLEDGE TO PROSPERITY: ECONOMIC LITERACY AS A PATHWAY TO POVERTY REDUCTION

Abstract

This study aims to analyze how economic literacy contributes to poverty reduction, particularly by identifying the specific mechanisms through which economic knowledge and financial behavior improvements affect the welfare of low-income communities in Indonesia. This research employs a Systematic Literature Review (SLR) method with PRISMA (Preferred Reporting Items for Systematic reviews and Meta-Analyses) framework to synthesize relevant peer-reviewed studies from Scopus and Google Scholar published between 2010 and 2025. A total of 17 articles that met inclusion criteria were reviewed to identify recurring patterns, mechanisms, and contextual variables linking economic literacy to poverty alleviation. The findings reveal that economic literacy significantly improves financial decision-making, encourages healthy financial behavior, and enhances the ability to manage income and expenses. It also promotes greater access to financial services, strengthens micro-entrepreneurship, and supports household-level economic resilience, particularly among vulnerable groups. This study contributes to Indonesian economic development by providing insights that can inform the design of inclusive financial education policies and programs. It highlights the importance of integrating economic literacy into school curricula, community outreach, and cross-sectoral collaboration to build sustainable prosperity and reduce income inequality. The findings suggest that embedding financial education in public policy, social assistance programs, and community development initiatives can foster sustainable poverty reduction and more inclusive economic participation across regions.