How Financial Literacy Affects Household Wealth Accumulation

How Financial Literacy Affects Household Wealth Accumulation.

This study isolates the causal effects of financial literacy and schooling on wealth accumulation using a new household dataset and an instrumental variables (IV) approach. Financial literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, whereas the IV estimates reveal even more potent effects of financial literacy. They also ...

Financial Literacy, Retirement Planning, and Household Wealth

There is ample empirical evidence documenting widespread financial illiteracy and limited pension knowledge. At the same time, the net worth distribution is heavily dispersed and many workers arrive on the verge of retirement with little or no personal wealth. This paper is the first to investigate the relation between financial sophistication and household net worth relying on specific measure...

How Do Pensions Affect Household Wealth Accumulation?

Most analyses of pension effects on saving behavior use an empirical specification derived from a very simple version of the life cycle model, with a fixed retirement age, a perfect capital market, isoelastic or quadratic preferences, and a " unitary " specification of household preferences. My empirical analysis relaxes several of these strong assumptions. The results indicate that estimates o...

How Personality Affects Literacy Development

How Wealth Accumulation Can Promote Cooperation

Explaining the emergence and stability of cooperation has been a central challenge in biology, economics and sociology. Unfortunately, the mechanisms known to promote it either require elaborate strategies or hold only under restrictive conditions. Here, we report the emergence, survival, and frequent domination of cooperation in a world characterized by selfishness and a strong temptation to d...