Financial Literacy and Pension Plan Participation in Italy

Fornero, Elsa; Monticone, Chiara

doi:10.2139/ssrn.1810475

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Financial Literacy and Pension Plan Participation in Italy

Netspar Discussion Paper No. 01/2011-019

32 Pages Posted: 18 Apr 2011

See all articles by Elsa Fornero

Elsa Fornero

University of Turin (Italy) - Department of Economics and Statistics; Center for Research on Pensions and Welfare Policies (CeRP); Netspar

Chiara Monticone

Organization for Economic Co-Operation and Development (OECD)

Date Written: January 31, 2011

Abstract

By requiring individuals to decide whether to participate in (newly established) pension funds, how much to contribute and how to invest their retirement wealth, pension reforms have raised concerns about the ability of households to deal with financial decisions. Using the Bank of Italy's Survey on Household Income and Wealth, our empirical analysis shows that most individuals lack knowledge of basic concepts such as interest rates and inflation. Males, the more educated and residents in the Centre-North possess higher literacy. As for the effects, financial literacy has a positive and significant impact on the probability of pension plan participation.

Keywords: financial literacy, retirement planning, pension plan participation

JEL Classification: D91

Suggested Citation: Suggested Citation

Fornero, Elsa and Monticone, Chiara, Financial Literacy and Pension Plan Participation in Italy (January 31, 2011). Netspar Discussion Paper No. 01/2011-019, Available at SSRN: https://ssrn.com/abstract=1810475 or http://dx.doi.org/10.2139/ssrn.1810475