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Cited by 125Financial Literacy, Pension, Retirement AnalysisFinancial Literacy and BehaviorDecision-Making and Behavioral Economics

The Outlook for Financial Literacy

Open access
Lusardi, Annamaria, Mitchell, Olivia·2011·National Bureau of Economic Research
DOI 10.3386/w17077
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Abstract

As the world becomes more financially integrated and complex, average individuals and their families are increasingly faced with making highly sophisticated and all-too-often irreversible financial decisions.Nowhere is this more evident than with regard to retirement decision-making.Indeed, the global financial crisis suggests that poor financial decision-making can have substantial costs not only for individuals but also society at large.This paper focuses on key lessons for financial decision-making in the wake of that crisis, exploring how financial literacy can enhance peoples' skills and abilities to make more informed economic choices.

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Crossref · 10.3386/w17077

Cites

33 of 33 references verified0 citation errors · 0 not checkable

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  • Older people tend to have a high confidence in their financial literacy although they do rather poorly on the test questions as well as with respect to their actual financial behavior.

    “In particular, older people tend to have a high confidence in their financial literacy although they do rather poorly on the test questions as well as with respect to their actual financial behavior”

    From Financial literacy, financial advice, and financial behavior (2017) · cites this paper as Lusardi and Mitchell 2011a, c

    The Financial Literacy and Financial Decision-Making section (page unavailable) reports that many older Americans answered basic financial-literacy questions incorrectly. It also links greater financial literacy with better planning, but does not say that older people generally have high confidence in their literacy or do poorly in their actual financial behavior. (LLM, conf=0.86)

    Experimental — accuracy not yet measured

  • Only half of older Americans could answer the two basic questions measuring understanding of interest rates and inflation.

    “only half of older Americans -who presumably had made many financial decisions in their lives -could answer the two basic questions measuring understanding of interest rates and inflation (Lusardi and Mitchell, 2011b).”

    From Financial literacy and the need for financial education: evidence and implications (2019) · cites this paper as Lusardi and Mitchell, 2011b

  • Just one third of older Americans demonstrated understanding of interest rates and inflation and answered the risk diversification question correctly.

    “And just one third demonstrated understanding of these two concepts and answered the third question, measuring understanding of risk diversification, correctly.”

    From Financial literacy and the need for financial education: evidence and implications (2019) · cites this paper as Lusardi and Mitchell, 2011b

  • Answers of survey participants differ significantly based on the wording of the test questions.

    “Specifically, Lusardi and Mitchell (2011a, b) and van Rooij et al. (2011b) document that the answers of survey participants differ significantly based on the wording of the test questions.”

    From Financial literacy, financial advice, and financial behavior (2017) · cites this paper as Lusardi and Mitchell (2011a, b)

    The Financial Literacy and Financial Decision-Making section reports how many respondents answered financial-literacy questions correctly, but does not compare answers to differently worded versions of a question. The Evaluating Financial Literacy Interventions section discusses how information is framed, not the wording of test questions. Searches for question wording and differently worded questions found no passage documenting the claimed difference in answers. (LLM, conf=0.73)

    Experimental — accuracy not yet measured

  • Financial literacy levels are lowest among the young and the old across countries.

    “A robust finding across countries is that financial literacy levels are lowest among the young and the old (e.g., Lusardi and Mitchell 2011a, c).”

    From Financial literacy, financial advice, and financial behavior (2017) · cites this paper as Lusardi and Mitchell 2011a, c

    The Financial Literacy and Financial Decision-Making section reports widespread financial illiteracy among older Americans, while Final Considerations describes illiteracy across countries. Neither section compares age groups or establishes that literacy is lowest among both the young and the old; searches for an age profile found no such passage. Page numbers were not available in our copy. (LLM, conf=0.72)

    Experimental — accuracy not yet measured

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Authors
Lusardi, A., & Mitchell, O.
Affiliations
National Bureau of Economic Research (US)
ORCID
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2011-05
DOI
10.3386/w17077
OpenAlex
W2106975706
Cited by
125
References
35
Citations by year
2026: 3 · 2024: 2 · 2023: 10 · 2022: 6 · 2021: 6 · 2020: 9 · 2019: 11 · 2018: 8 · 2017: 11 · 2016: 9 · 2015: 16 · 2014: 8 · 2013: 6 · 2012: 4
Type
report
Language
en
Open access
Locations
National Bureau of Economic Research (publishedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy and Behavior
  • Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
Keywords
financial literacy, financial decision-making, retirement planning, 2008 financial crisis, household finance, financial integration, economic choice

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