Premium
The Links between Early‐Life Cognition and Schooling and Late‐Life Financial Knowledge
Author(s) -
HERD PAMELA,
HOLDEN KAREN,
SU YUNG TING
Publication year - 2012
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.1745-6606.2012.01235.x
Subject(s) - coursework , cognition , psychology , finance , human capital , sample (material) , net worth , economics , mathematics education , economic growth , debt , chemistry , chromatography , neuroscience
Using the Wisconsin Longitudinal Study, a sample of Wisconsin high school graduates from the class of 1957, we explore the relationship between late‐life financial knowledge and human capital formed in early life. Specifically, we examine the associations between early‐life cognition and schooling experiences—such as academic performance and coursework—and late‐life financial knowledge. Financial knowledge is measured as individuals' knowledge of their own financial situations, which we argue is a prerequisite for good financial behavior. We find that those with lower early‐life cognitive functioning, especially those without college degrees, have lower levels of financial knowledge in late life. We find more limited evidence for independent associations of academic performance and math course work with late‐life financial knowledge.