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Childhood Roots of Financial Literacy

Listed author(s):
  • Antonia Grohmann
  • Roy Kouwenberg
  • Lukas Menkhoff

Financial literacy predicts informed financial decisions, but what explains financial literacy? We use the concept of financial socialization and aim to represent three major agents of financial socialization: family, school and work. Thus we compile twelve relevant childhood characteristics in a new survey study and examine their relation to financial literacy, while controlling for established socio-demographic characteristics. We find in a mediation analysis that both family and school positively affect the financial literacy of adults. Moreover, financial literacy and school related variables also have a direct effect on financial behavior. This suggests that family factors and schooling work through complementary channels.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.513784.de/dp1504.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1504.

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Length: 42 p.
Date of creation: 2015
Handle: RePEc:diw:diwwpp:dp1504
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