TY  - JOUR
AU  - Lusardi,Annamaria
TI  - Financial Literacy: An Essential Tool for Informed Consumer Choice?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14084
PY  - 2008
Y2  - June 2008
UR  - http://www.nber.org/papers/w14084
L1  - http://www.nber.org/papers/w14084.pdf
N1  - Author contact info:
Annamaria Lusardi
NBER
1050 Massachusetts Avenue
Cambridge, MA 02138
Tel: 617-588-1461
E-Mail: a.lusardi@dartmouth.edu
AB  - Increasingly, individuals are in charge of their own financial security and are confronted with ever more complex financial instruments. However, there is evidence that many individuals are not well-equipped to make sound saving decisions. This paper demonstrates widespread financial illiteracy among the U.S. population, particularly among specific demographic groups. Those with low education, women, African-Americans, and Hispanics display particularly low levels of literacy. Financial literacy impacts financial decision-making. Failure to plan for retirement, lack of participation in the stock market, and poor borrowing behavior can all be linked to ignorance of basic financial concepts. While financial education programs can result in improved saving behavior and financial decision-making, much can be done to improve these programs' effectiveness.
ER  -