Financial Literacy and Retirement Planning in Germany
AbstractWe examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have little financial literacy compared to their West German counterparts. Interestingly, there is no gender disparity in financial knowledge in the East. In order to investigate the nexus of causality between financial literacy and retirement planning we develop an IV strategy by making use of regional variation in the financial knowledge of peers. We find a positive impact of financial knowledge on retirement planning.
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Bibliographic InfoPaper provided by Center for Research on Pensions and Welfare Policies, Turin (Italy) in its series CeRP Working Papers with number 109.
Length: 33 pages
Date of creation: Mar 2011
Date of revision:
Financial sophistication; retirement planning; life-cycle savings; financial education; East Germany;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
This paper has been announced in the following NEP Reports:
- NEP-AGE-2011-04-16 (Economics of Ageing)
- NEP-ALL-2011-04-16 (All new papers)
- NEP-EUR-2011-04-16 (Microeconomic European Issues)
- NEP-LAB-2011-04-16 (Labour Economics)
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