Financial Literacy: An International Comparison

Abstract

This paper uses international panel data on 55 countries from 1995 to 2008, merging indicators of financial literacy with a large set of macroeconomic and institutional variables. Results show that there is substantial heterogeneity of financial and economic competence across countries, and that human capital indicators (PISA test scores and college attendance) are positively correlated with financial literacy. Furthermore, inhabitants of countries with more generous social security systems are generally less literate, lending support to the hypothesis that the incentives to acquire financial literacy are related to the amount of resources available for private accumulation.

JEL Classification: E2, D8, G1