Financial Literacy and Perceived Economic Outcomes

32 Pages Posted: 3 Jan 2019 Last revised: 23 Jul 2021

See all articles by David Puelz

David Puelz

University of Chicago - Booth School of Business

Robert Puelz

Southern Methodist University (SMU) - Real Estate, Insurance, & Business Law Department

Date Written: December 30, 2020

Abstract

We explore the relationship between financial literacy and self-reported economic outcomes using survey data from the United States. Our dataset includes a large number of covariates from the National Financial Capability Study (NCFS), widely used by literacy researchers, and we use a new econometric technique developed by Hahn et al. (2018), designed specifically for causal inference from observational data, to test whether changes in financial literacy infer meaningful changes in self-perceived economic outcomes. We find a negative treatment parameter on financial literacy contrary to the presumption in many empirical studies, and consistent with the recent work of Netemeyer et al. (2018). We conclude with a discussion of heterogeneity of the financial literacy treatment effect on household income, gender and education level subpopulations. In general, we do not find the effect of more financial literacy is to raise perceived economic outcomes.

Keywords: Financial Literacy, Economic Outcomes, Treatment Effect Estimation

JEL Classification: D1

Suggested Citation

Puelz, David and Puelz, Robert, Financial Literacy and Perceived Economic Outcomes (December 30, 2020). Available at SSRN: https://ssrn.com/abstract=3302978 or http://dx.doi.org/10.2139/ssrn.3302978

David Puelz (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Robert Puelz

Southern Methodist University (SMU) - Real Estate, Insurance, & Business Law Department ( email )

United States
214-768-4156 (Phone)
214-768-3713 (Fax)

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