Financial Literacy and Pension Plan Participation in Italy

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

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

Elsa Fornero (Contact Author)

University of Turin (Italy) - Department of Economics and Statistics ( email )

Via Po, 53
Torino, 10124
Italy
+39-011-6706076 (Phone)

Center for Research on Pensions and Welfare Policies (CeRP)

Via Real Collegio, 30
Moncalieri, Turin
Italy

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Chiara Monticone

Organization for Economic Co-Operation and Development (OECD)

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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