Explaining Financial Literacy in Japan: New Evidence Using Financial Knowledge, Behavior, and Attitude

Abstract

This study examines the demographic and socioeconomic factors explaining financial literacy in Japan by decomposing financial literacy into financial knowledge, attitude, and behavior, which provides a deeper understanding of the relationships. We used a large dataset from a national survey conducted by the Bank of Japan in 2016. The GSEM in logit and the OLS regression coefficients show that age, education, balance of financial assets, and use of financial information are positively related to overall financial literacy and its three components, while employment status and experience of financial trouble are negatively associated. Moreover, we show that males perform better than females do in the overall measure of financial literacy and financial knowledge, though females outperform males with regard to financial behavior and financial attitude.

Keywords: financial literacy, financial knowledge, financial behavior, financial attitude, demographic and socio-economic characteristics

JEL Classification: D14, D19, D10