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Financial Literacy and Retirement Planning in the Netherlands

Author

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  • Maarten van Rooij
  • Annamaria Lusardi
  • Rob Alessie

Abstract

The complexity of financial decisions households are faced with has increased tounprecedented levels. At the same time, recent research documents large differences ineconomic knowledge among households and indicates that household financial skills may beinadequate to cope with the increasing responsibility for making retirement decisions. In thispaper, we examine the relationship between financial knowledge and retirement planning inthe Netherlands. For this purpose, we have designed a customized module for the DNB (DeNederlandsche Bank) Household Survey. We identify a strong and positive associationbetween financial knowledge and retirement planning. Using information on economicseducation when young, we show that the nexus of causality goes from literacy to planningrather than the other way around.ÂÂ

Suggested Citation

  • Maarten van Rooij & Annamaria Lusardi & Rob Alessie, 2009. "Financial Literacy and Retirement Planning in the Netherlands," DNB Working Papers 231, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:dnbwpp:231
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    References listed on IDEAS

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    Cited by:

    1. Rob Alessie & Maarten van Rooij & Annamaria Lusardi, 2011. "Financial Literacy, Retirement Preparation and Pension Expectations in the Netherlands," DNB Working Papers 289, Netherlands Central Bank, Research Department.
    2. Stephens, Thomas A & Tyran, Jean-Robert, 2012. "“At least I didn’t lose money” Nominal Loss Aversion Shapes Evaluations of Housing Transactions," CEPR Discussion Papers 9198, C.E.P.R. Discussion Papers.
    3. Jappelli, Tullio & Padula, Mario, 2013. "Investment in financial literacy and saving decisions," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2779-2792.
    4. van Rooij, Maarten C.J. & Lusardi, Annamaria & Alessie, Rob J.M., 2011. "Financial literacy and retirement planning in the Netherlands," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 593-608, August.
    5. repec:taf:applec:v:49:y:2017:i:53:p:5477-5490 is not listed on IDEAS
    6. van der Cruijsen, Carin & de Haan, Jakob & Jansen, David-Jan & Mosch, Robert, 2013. "Knowledge and opinions about banking supervision: Evidence from a survey of Dutch households," Journal of Financial Stability, Elsevier, pages 219-229.
    7. Vanessa Mak & Jurgen Braspenning, 2012. "Errare humanum est: Financial Literacy in European Consumer Credit Law," Journal of Consumer Policy, Springer, vol. 35(3), pages 307-332, September.
    8. Spiros Bougheas & Tianxi Wang, 2015. "Optimal Organization of Financial Intermediaries," CESifo Working Paper Series 5452, CESifo Group Munich.
    9. Gathergood, John & Weber, Jörg, 2017. "Financial literacy, present bias and alternative mortgage products," Journal of Banking & Finance, Elsevier, vol. 78(C), pages 58-83.
    10. van Schie, Ron J.G. & Donkers, Bas & Dellaert, Benedict G.C., 2012. "Savings adequacy uncertainty: Driver or obstacle to increased pension contributions?," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 882-896.
    11. Dick, Christian D. & Jaroszek, Lena M., 2013. "Knowing what not to do: Financial literacy and consumer credit choices," ZEW Discussion Papers 13-027, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    12. Bateman, Hazel & Eckert, Christine & Geweke, John & Louviere, Jordan & Satchell, Stephen & Thorp, Susan, 2014. "Financial competence, risk presentation and retirement portfolio preferences," Journal of Pension Economics and Finance, Cambridge University Press, vol. 13(01), pages 27-61, January.
    13. John Gathergood & Joerg Weber, 2012. "Self-Control, Financial Literacy and Co-Holding Puzzle," Discussion Papers 2012-02, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
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    15. Richard Disney & John Gathergood, "undated". "Financial Literacy and Consumer Credit Portfolios," Discussion Papers 12/06, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    16. Bernd Hayo & Matthias Uhl, 2017. "Taxation and consumption: evidence from a representative survey of the German population," Applied Economics, Taylor & Francis Journals, vol. 49(53), pages 5477-5490, November.
    17. Fatih B. GUMUS & Yusuf DAYIOGLU, 2015. "An Analysis on The Socio-Economic and Demographic Factors That Have an Effect on The Risk Taking Preferences of Personal Investors," International Journal of Economics and Financial Issues, Econjournals, pages 136-147.
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    More about this item

    Keywords

    Thinking about Retirement; Knowledge of Finance and Economics; FinancialSophistication; Economics Schooling.;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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