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Financial literacy and retirement saving

1 May 2012

Our multivariate analysis suggests that raising an individual’s literacy score to the level of the most literate group (from the level of the least literate group) increases the probability of saving for retirement by 10 per cent. [...] We discuss the retirement saving behaviour of Canadians in section 4 and report the results of our empirical work examining the impact of financial literacy on retirement saving. [...] We conclude in section 6. 2. An overview of the Canadian Financial Capability Survey To explore the issue of financial literacy and retirement saving, we use data from the Canadian Financial Capability Survey (CFCS). [...] In this respect, the CFCS is the first nationally-representative survey to include questions to measure and evaluate the financial literacy of Canadians. [...] Evaluated at the means of all the other socio-demographic variables, a rise from the lowest group (0 to 50 per cent) to the top group (85 per cent to 100 per cent) in financial literacy scores is associated with a 10 per cent increase in the probability of saving for retirement (from 81 to 89 per cent).
education economics economy insurance credit finance inflation interest investments labour literacy mathematics retirement loan mortgage financial literacy instrumental variables regression pricing further education logistic regression ols logit model instrumental variables estimation multicollinearity r-squared likelihood

Authors

Mullock, Katharine

Pages
38
Published in
Canada

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