Culture and Adult Financial Literacy: Evidence from the United States

Arbeitspapier

Using a US nationally representative sample of over 6,000 adults from 26 countries of ancestry, we find a strong association between their financial literacy in the US and the financial literacy level in their self-reported country of ancestry. More specifically, if an individual from a country of ancestry with "average" financial literacy had instead come from a country with financial literacy one-standard deviation above the mean, his or her likelihood of answering correctly basic financial literacy questions regarding inflation, risk diversification, and interest rate in the US would have increased by 4 percentage points, a 9% increase relative to the average financial literacy in our sample of 43%. The cultural components behind this observed association include a strong emphasis on patience, long-term orientation and risk-aversion in the country of ancestry. We also find that the association is driven by financial literacy on risk diversification and interest compounding.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 13349

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Household Saving; Personal Finance ; Educational Finance; Financial Aid ; Cultural Economics; Economic Sociology; Economic Anthropology: General
• Thema: financial literacy ; culture ; epidemiological approach ; economic decisions

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Davoli, Maddalena ; Rodríguez-Planas, Núria
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2020

Weitere Informationen

• Handle: http://hdl.handle.net/10419/223791
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ