Working Paper: NBER ID: w15352
Authors: Annamaria Lusardi; Olivia S. Mitchell; Vilsa Curto
Abstract: We examined financial literacy among the young using data from the 1997 National Longitudinal Survey of Youth. We showed that financial literacy is low among the young; fewer than one-third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy. These findings have implications for consumer policy.
Keywords: financial literacy; young adults; consumer policy; financial education
JEL Codes: D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| financial literacy (G53) | educational attainment (I21) |
| financial literacy (G53) | cognitive ability (G53) |
| educational attainment (I21) | financial literacy (G53) |
| cognitive ability (G53) | financial literacy (G53) |
| family background (J12) | financial literacy (G53) |
| gender (J16) | financial literacy (G53) |
| race (J15) | financial literacy (G53) |