Childhood Roots of Financial Literacy
44 Pages Posted: 24 Sep 2015
Date Written: August 2015
Financial literacy predicts informed financial decisions, but what explains financial literacy? We use the concept of financial socialization and aim to represent three major agents of financial socialization: family, school and work. Thus we compile twelve relevant childhood characteristics in a new survey study and examine their relation to financial literacy, while controlling for established socio-demographic characteristics. We find in a mediation analysis that both family and school positively affect the financial literacy of adults. Moreover, financial literacy and school related variables also have a direct effect on financial behavior. This suggests that family factors and schooling work through complementary channels.
Keywords: Financial literacy, financial behavior, family background, education, numeracy
JEL Classification: D14, G11, I20
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