Financial Literacy Among the Young: Evidence and Implications for Consumer Policy

35 Pages Posted: 23 Aug 2009

See all articles by Olivia S. Mitchell

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Vilsa Curto

National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: August 21, 2009

Abstract

We examined financial literacy among the young using data from the 1997 National Longitudinal Survey of Youth. We showed that financial literacy is low among the young; fewer than one-third of young adults possess basic knowledge of interest rates, inflation, and risk diversification. Financial literacy is strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college-educated male whose parents had stocks and retirement savings is about 50 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy. These findings have implications for consumer policy.

Suggested Citation

Mitchell, Olivia S. and Lusardi, Annamaria and Curto, Vilsa, Financial Literacy Among the Young: Evidence and Implications for Consumer Policy (August 21, 2009). Pension Research Council WP 2009-09. Available at SSRN: https://ssrn.com/abstract=1459141 or http://dx.doi.org/10.2139/ssrn.1459141

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Annamaria Lusardi

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States

HOME PAGE: http://business.gwu.edu/profiles/annamaria-lusardi/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vilsa Curto

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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