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Financial literacy and anxiety about life in old age: evidence from the USA

Author

Listed:
  • Yoshihiko Kadoya

    (Hiroshima University)

  • Mostafa Saidur Rahim Khan

    (Nagoya University)

  • Tomomi Hamada

    (Chubu University)

  • Alvaro Dominguez

    (Nagoya University)

Abstract

This study examines whether financial literacy can help to reduce anxiety about life in old age. We hypothesized that financially literate people are more able to earn income and accumulate assets, leading them to have a less anxious life in old age. On the other hand, less financially literate people rely more on social security to secure themselves in the old age as they are not able to accumulate sufficient assets. By using US survey data, we provide evidence that assets significantly reduce anxiety about life in old age only for people who are more financially literate. For less financially literate people, social security plays an important role in reducing anxiety about life in old age. Besides these, having a child and doing regular exercise also reduced anxiety for all respondents but marital status reduced anxiety in respondents over 40 years of age. The results of our study are robust to measurement of financial literacy and endogeneity problems.

Suggested Citation

  • Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Tomomi Hamada & Alvaro Dominguez, 2018. "Financial literacy and anxiety about life in old age: evidence from the USA," Review of Economics of the Household, Springer, vol. 16(3), pages 859-878, September.
  • Handle: RePEc:kap:reveho:v:16:y:2018:i:3:d:10.1007_s11150-017-9401-1
    DOI: 10.1007/s11150-017-9401-1
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Tomomi Yamane, 2020. "Government’s Stimulus Program to Boost Consumer Spending: A Case of Discount Shopping Coupon Scheme in Japan," Sustainability, MDPI, Open Access Journal, vol. 12(9), pages 1-12, May.
    2. Shunsuke Ono & Pattaphol Yuktadatta & Takafumi Taniguchi & Tomoe Iitsuka & Masafumi Noguchi & Sawa Tanaka & Haruka Ito & Kousei Nakamura & Nanako Yasuhara & Chihiro Miyawaki & Katsumi Mikura & Mostafa, 2021. "Financial Literacy and Exercise Behavior: Evidence from Japan," Sustainability, MDPI, Open Access Journal, vol. 13(8), pages 1-15, April.
    3. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan, 2020. "Financial Literacy in Japan: New Evidence Using Financial Knowledge, Behavior, and Attitude," Sustainability, MDPI, Open Access Journal, vol. 12(9), pages 1-15, May.
    4. Andrzej Cwynar & Wiktor Cwynar & Monika Baryła-Matejczuk & Moises Betancort, 2019. "Sustainable Debt Behaviour and Well-Being of Young Adults: The Role of Parental Financial Socialisation Process," Sustainability, MDPI, Open Access Journal, vol. 11(24), pages 1-26, December.
    5. Edouard Ribes, 2021. "What are the financial implications of an ageing population for European citizens?," Working Papers hal-03118783, HAL.
    6. Pongpat Putthinun & Somtip Watanapongvanich & Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2021. "Financial Literacy and Alcohol Drinking Behavior: Evidence from Japan," Sustainability, MDPI, Open Access Journal, vol. 13(16), pages 1-13, August.

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    More about this item

    Keywords

    Aging policy; Anxiety; Financial literacy; United States;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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