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Financial literacy and retirement planning in Finland

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  • KALMI, PANU
  • RUUSKANEN, OLLI-PEKKA

Abstract

This paper presents the results from the first study of financial literacy in Finland and explores the relationship between financial literacy and retirement planning in Finland. Finland is an interesting case because countervailing effects may exist: a high level of education might increase financial literacy, while the high provision of social security may decrease it and weaken its relationship with pension planning. The results indicate that the level of financial literacy in Finland is comparatively high, although it is unequally distributed among the population. With respect to pension planning, we find that there is little evidence of a relationship between the three core financial literacy questions and retirement planning; however, a statistically significant and positive relationship exists between retirement planning and an extended measure of financial literacy, consisting mostly of more demanding questions. When we split the sample by gender, we find evidence of a positive relationship between financial literacy and retirement planning among women but not among men. The results indicate that scaling down publicly guaranteed pension benefits may pose a challenge to the less financially literate segment of the population.

Suggested Citation

  • Kalmi, Panu & Ruuskanen, Olli-Pekka, 2018. "Financial literacy and retirement planning in Finland," Journal of Pension Economics and Finance, Cambridge University Press, vol. 17(3), pages 335-362, July.
    • Handle: RePEc:cup:jpenef:v:17:y:2018:i:03:p:335-362_00
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    Cited by:

    1. Elisabeth Beckmann & Sarah Reiter, 2020. "How financially literate is CESEE? Insights from the OeNB Euro Survey," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/20, pages 36-59.
    2. Xiaobo Xu & Martin Young & Liping Zou & Jiali Fang, 2023. "Retirement Income and Financial Market Participation in New Zealand," IJFS, MDPI, vol. 11(1), pages 1-23, January.
    3. Sirli Mandmaa, 2020. "How to Promote Personal Financial Education - Findings from Finnish University Students’ Financial Literacy Study," International Journal of Educational Technology and Learning, Scientific Publishing Institute, vol. 10(1), pages 8-25.
    4. Ruiting Sun & Huanhuan Zhang & Calum G. Turvey & Xueping Xiong, 2021. "Impact of Financial Literacy on Retirement Financial Portfolio: Evidence from China," Asian Economic Journal, East Asian Economic Association, vol. 35(4), pages 390-412, December.
    5. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    6. Panu Kalmi & Gianluca Trotta & Andrius Kažukauskas, 2021. "Energy‐related financial literacy and electricity consumption: Survey‐based evidence from Finland," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1062-1089, September.

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