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Financial Literacy, Riester Pensions, and Other Private Old Age Provision in Germany

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  • Bucher-Koenen, Tabea

    (Munich Center for the Economics of Aging (MEA))

Abstract

Financial knowledge is not wide spread in Germany. In that respect we confi rm results found for other countries, like the United States and the Netherlands. Women, those with low education and low income, as well as households in east Germany are at risk of having low fi nancial literacy. In 2001 a state subsidized private pension scheme (Riester pensions) was introduced in Germany. The central question is, Are Riester pensions successful at encouraging individuals with low fi nancial literacy to save privately for old age? Our results indicate that financial literacy is positively related to privately saving for retirement independent of state subsidies. Levels of private coverage are particularly low among individuals in the lowest income quartile, who would profi t most from the state subsidies. At the same time they show the lowest levels of financial literacy.

Suggested Citation

  • Bucher-Koenen, Tabea, 2011. "Financial Literacy, Riester Pensions, and Other Private Old Age Provision in Germany," MEA discussion paper series 11250, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
    • Handle: RePEc:mea:meawpa:11250
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    Cited by:

    1. Ihle, Dorothee, 2017. "Quantile treatment effects of Riester participation on wealth," CAWM Discussion Papers 96, University of Münster, Münster Center for Economic Policy (MEP).
    2. repec:ces:ifodic:v:13:y:2015:i:2:p:19166284 is not listed on IDEAS
    3. Axel Börsch-Supan & Tabea Bucher-Koenen & Michela Coppola & Bettina Lamla, 2015. "Savings In Times Of Demographic Change: Lessons From The German Experience," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 807-829, September.
    4. Martin Werding, 2016. "One Pillar Crumbling, the Others Too Short: Old-Age Provision in Germany," National Institute Economic Review, National Institute of Economic and Social Research, vol. 237(1), pages 13-21, August.
    5. Tabea Bucher-Koenen & Annamaria Lusardi & Rob Alessie & Maarten van Rooij, 2017. "How Financially Literate Are Women? An Overview and New Insights," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(2), pages 255-283, July.
    6. Michael Ziegelmeyer & Julius Nick, 2013. "Backing out of private pension provision: lessons from Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(3), pages 505-539, August.
    7. repec:mea:meawpa:12262 is not listed on IDEAS
    8. Bettina Lamla, 2012. "Family Background, Informal Networks and the Decision to Provide for Old Age: A Siblings Approach," SOEPpapers on Multidisciplinary Panel Data Research 466, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. repec:mea:meawpa:12261 is not listed on IDEAS
    10. Bettina Lamla, 2013. "Family background and the decision to provide for old age: a siblings approach," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 40(3), pages 483-504, August.
    11. Oscar A. Stolper & Andreas Walter, 2017. "Financial literacy, financial advice, and financial behavior," Journal of Business Economics, Springer, vol. 87(5), pages 581-643, July.
    12. Martin Werding, 2015. "Old-age Provision in Germany: The Crisis Impedes a Shift Towards Higher Pre-funding," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(2), pages 08-13, 08.
    13. Martin Werding, 2015. "Old-age Provision in Germany: The Crisis Impedes a Shift Towards Higher Pre-funding," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(02), pages 08-13, August.
    14. Dorothee Ihle, 2017. "Quantile Treatment Effects of Riester Participation on Wealth," SOEPpapers on Multidisciplinary Panel Data Research 954, DIW Berlin, The German Socio-Economic Panel (SOEP).
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    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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