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Financial Literacy among the Young
Author(s) -
LUSARDI ANNAMARIA,
MITCHELL OLIVIA S.,
CURTO VILSA
Publication year - 2010
Publication title -
journal of consumer affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.582
H-Index - 62
eISSN - 1745-6606
pISSN - 0022-0078
DOI - 10.1111/j.1745-6606.2010.01173.x
Subject(s) - financial literacy , sophistication , diversification (marketing strategy) , literacy , demographic economics , national longitudinal surveys , economics , business , psychology , finance , economic growth , sociology , marketing , social science
We examined financial literacy among the young using the most recent wave of the 1997 National Longitudinal Survey of Youth. We showed that financial literacy is low; fewer than one‐third of young adults possess basic knowledge of interest rates, inflation and risk diversification. Financial literacy was strongly related to sociodemographic characteristics and family financial sophistication. Specifically, a college‐educated male whose parents had stocks and retirement savings was about 45 percentage points more likely to know about risk diversification than a female with less than a high school education whose parents were not wealthy.