Working Paper: CEPR ID: DP18533
Authors: Annamaria Lusardi; Olivia S. Mitchell
Abstract: We undertake an assessment of our two decades of research on financial literacy, building on our empirical research and theoretical work casting financial knowledge as a form of investment in human capital. We also draw on recent data to determine who is the most – and least – financially savvy in the United States, and we highlight the similarity of our results in other countries. A number of convincing studies is now available, from which we draw conclusions about the effects and consequences of financial illiteracy, and what can be done to fill these gaps. We conclude by offering our thoughts on implications for teaching, policy, and future research.
Keywords: financial education; inflation; expectation channel
JEL Codes: G53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial literacy (G53) | retirement planning (J26) |
| financial literacy (G53) | wealth accumulation (E21) |
| financial literacy (G53) | better investment outcomes (G11) |
| financial literacy (G53) | stock market investment (G10) |
| financial literacy (G53) | higher risk-adjusted returns (G11) |
| financial literacy (G53) | wealth inequality (D31) |