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Financial Literacy in Japan: Determinants and Impacts

Author

Listed:
  • Yoshino, Naoyuki

    (Asian Development Bank Institute)

  • Morgan, Peter

    (Asian Development Bank Institute)

  • Trinh, Long Q.

    (Asian Development Bank Institute)

Abstract

Financial literacy is gaining increasing importance as a policy objective in many countries. However, internationally comparable information on financial literacy is still scarce. Recently, the Bank of Japan conducted a major survey of financial literacy and financial behavior covering 25,000 individuals aged from 18 to 79. We used this database to analyze the determinants of financial literacy and the effects of financial literacy on other behaviors. Generally, our study corroborated the findings of studies on other countries, but it uncovered some differences as well. We found that the main determinants of financial literacy are the educational level, income, age, and occupational status and that both financial literacy and general education levels are related positively and significantly to savings behavior and financial inclusion.

Suggested Citation

  • Yoshino, Naoyuki & Morgan, Peter & Trinh, Long Q., 2017. "Financial Literacy in Japan: Determinants and Impacts," ADBI Working Papers 796, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0796
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    References listed on IDEAS

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    1. Daniel Fernandes & John G. Lynch & Richard G. Netemeyer, 2014. "Financial Literacy, Financial Education, and Downstream Financial Behaviors," Management Science, INFORMS, vol. 60(8), pages 1861-1883, August.
    2. van Rooij, Maarten & Lusardi, Annamaria & Alessie, Rob, 2011. "Financial literacy and stock market participation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 449-472, August.
    3. Justine S. Hastings & Brigitte C. Madrian & William L. Skimmyhorn, 2013. "Financial Literacy, Financial Education, and Economic Outcomes," Annual Review of Economics, Annual Reviews, vol. 5(1), pages 347-373, May.
    4. Victor Stango & Jonathan Zinman, 2009. "Exponential Growth Bias and Household Finance," Journal of Finance, American Finance Association, vol. 64(6), pages 2807-2849, December.
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    Cited by:

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    2. Hiroko Araki & Juan Nelson Martinez Dahbura, 2021. "The Heterogeneous Relationship Between Financial Education and Investment Behavior in Japan," Keio-IES Discussion Paper Series 2021-018, Institute for Economics Studies, Keio University.
    3. Raksmey, Uch & Lin, Ching-Yang & Kakinaka, Makoto, 2022. "Macroprudential regulation and financial inclusion: Any difference between developed and developing countries?," Research in International Business and Finance, Elsevier, vol. 63(C).
    4. Fujiki, Hiroshi, 2020. "Are the actual and intended sources of financial knowledge the same? Evidence from Japan," Japan and the World Economy, Elsevier, vol. 55(C).
    5. Hiroshi Fujiki, 2019. "Who needs guidance from a financial adviser? Evidence from Japan," Working Papers on Central Bank Communication 011, University of Tokyo, Graduate School of Economics.
    6. Pongpat Putthinun & Somtip Watanapongvanich & Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2021. "Financial Literacy and Alcohol Drinking Behavior: Evidence from Japan," Sustainability, MDPI, vol. 13(16), pages 1-13, August.
    7. Naoyuki Yoshino & Sahoko Kaji, 2020. "The Macroeconomic Effects of Fintech," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(4), pages 1-19, August.
    8. Trinh Xuan Thi Nguyen & Sumeet Lal & Sulemana Abdul-Salam & Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2022. "Financial Literacy, Financial Education, and Cancer Screening Behavior: Evidence from Japan," IJERPH, MDPI, vol. 19(8), pages 1-17, April.

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    More about this item

    Keywords

    financial literacy; financial behavior; financial inclusion; household saving; Japan;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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