Financial Literacy and Perceived Economic Outcomes

33 Pages Posted: 3 Jan 2019 Last revised: 26 May 2022

See all articles by David Puelz

David Puelz

University of Texas at Austin - Red McCombs School of Business; 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, reflective economic outcomes from respondents using survey data from the United States. Our dataset includes a large number of covariates from the National Financial Capability Study (NFCS), 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 consistent with the recent work of Netemeyer et al. (2018) and contrary to the presumption in many empirical studies that associate standard financial outcome measures with financial literacy. We conclude with a discussion of heterogeneity of the financial literacy treatment effect on household income, gender and education level sub-populations. Our findings on the relationship between financial literacy and reflective economic outcomes also raise questions about its importance to an individual’s financial well-being.

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 Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

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)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
94
Abstract Views
1,169
rank
372,674
PlumX Metrics