Has Financial Knowledge Increased in the United States?
Journal of Financial Counseling and Planning, Forthcoming
27 Pages Posted: 28 Mar 2022
Date Written: February 26, 2022
This study explores financial knowledge patterns from 2009 to 2018, focusing on objective and subjective knowledge, overconfidence in financial knowledge, and “Don’t know” responses. We used four waves of National Financial Capability Study (NFCS) datasets. Objective financial knowledge was lower in 2018 than in 2009, and the proportion of individuals who were overconfident was higher in 2018 than in 2009. The mean number of “Don’t know” responses to objective knowledge questions increased consistently over the period. Most of these patterns persisted when we controlled for household characteristics in regressions. The lack of increases in financial knowledge despite formal and informal educational efforts raises the question as to whether existing efforts for formal and informal education are sufficient.
Keywords: Financial knowledge, financial literacy, overconfidence, trends, National Financial Capability Study
JEL Classification: D14,D83,G40, G53
Suggested Citation: Suggested Citation