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.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
15352.
Length: Date of creation: Sep 2009 Date of revision: Handle: RePEc:nbr:nberwo:15352
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Find related papers by JEL classification: D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
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Annamaria Lusardi & Ricardo Daniel Cossa & Erin L. Krupka, 2001.
"Savings of Young Parents,"
JCPR Working Papers
229, Northwestern University/University of Chicago Joint Center for Poverty Research.
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