Showing papers by "Annamaria Lusardi published in 2021"
TL;DR: This paper conducted a meta-analysis of 76 randomized experiments with a total sample size of over 160,000 individuals and found that financial education programs have, on average, positive causal treatment effects on financial knowledge and downstream financial behaviors.
100 citations
TL;DR: This paper used data from the 2020 TIAA-Institute-GFLEC Personal Finance (P-Fin) Index to show that many American families were financially fragile well before the COVID-19 pandemic hit the U.S. economy.
Abstract: This article uses data from the 2020 TIAA Institute-GFLEC Personal Finance (P-Fin) Index to show that many American families were financially fragile well before the COVID-19 pandemic hit the U.S. economy. Financial fragility is particularly severe among specific demographic groups, such as African-Americans and those with low income. The article also shows that financial fragility is strongly linked to financial literacy and that many Americans are ill-equipped to deal with the financial decisions needed to navigate through a financial crisis. Suggestions are provided to deal with personal finance decisions in times of emergency.
48 citations
TL;DR: In this article, the authors introduce a novel survey measure of attitude towards debt and match the survey results with panel data on Swedish household balance sheets from registry data, showing that their measure of debt at...
Abstract: We introduce a novel survey measure of attitude towards debt. Matching our survey results with panel data on Swedish household balance sheets from registry data, we show that our measure of debt at ...
42 citations
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TL;DR: This paper found that women tend to disproportionately respond "do not know" to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer, and about one-third of the financial literacy gender gap can be explained by women's lower confidence levels.
Abstract: Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond “do not know” to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women’s lower confidence levels. Both financial knowledge and confidence explain stock market participation.
32 citations
TL;DR: This paper found that women tend to disproportionately respond "do not know" to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer, and about one-third of the financial literacy gender gap can be explained by women's lower confidence levels.
Abstract: Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond "do not know" to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women's lower confidence levels. Both financial knowledge and confidence explain stock market participation.
32 citations
TL;DR: In this article, the authors examined the factors that contribute to financial well-being of Black and Hispanic women compared to white women, including the distinct impacts of education, family structure, employment, and financial literacy.
Abstract: This article provides an in-depth examination of the financial well-being of Black and Hispanic women and the factors contributing to that well-being, using the 2018 survey wave of the National Financial Capability Study. The article documents meaningful differences between Black and Hispanic women versus White women; the former are more likely to face economic challenges that depress financial well-being. Controlling for differences in sociodemographic characteristics, important dissimilarities distinguish the factors that contribute to financial well-being for Black and Hispanic women compared to White women—including the distinct impacts of education, family structure, employment, and financial literacy. The results imply that extant financial education programs inadequately address the needs of Black and Hispanic women. TOPICS:Wealth management, legal/regulatory/public policy Key Findings ▪ We explore the factors shaping financial well-being with a special focus on Black and Hispanic women between the ages of 22 and 60, in the 2018 National Financial Capability Study. ▪ Differences in demographic factors contribute to FWB across race and ethnicity, including education, family structure, employment, and financial literacy, provide insight into why subjective FWB scores do not appear to differ across race and ethnicity, despite objective measures, such as borrowing behavior, indicating strong differences. ▪ Our findings lead us to conclude that a “one size fits all” approach is unlikely to address differences in financial well-being across the board and, in particular, across sub-groups of women.
11 citations
TL;DR: This article found that the more financially literate were better able to handle such shocks, indicating that knowledge can provide some additional protection during a pandemic, and that younger respondents were at particular risk of facing financial difficulties, especially younger respondents, those with larger families, Hispanics, and the low income.
Abstract: Early in the COVID-19 pandemic, much of the US economy was closed to limit the virus’ spread, and several emergency interventions were implemented. Our analysis of older (45-75) respondents fielded in April-May of 2020 indicates that about one in five respondents was financially fragile and would have difficulty facing a mid-size emergency expense. Some subgroups were at particular risk of facing financial difficulties, especially younger respondents, those with larger families, Hispanics, and the low income. Moreover, the more financially literate were better able to handle such shocks, indicating that knowledge can provide some additional protection during a pandemic.
8 citations
TL;DR: A method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences is introduced, which yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis.
Abstract: We introduce a method for experimentally evaluating interventions designed to improve the quality of choices in settings where people imperfectly comprehend consequences. Among other virtues, our method yields an intuitive sufficient statistic for welfare that admits formal interpretations even when consumers suffer from biases outside the scope of analysis. We use it to study a financial education intervention, which we find improves the quality of decisions only when it incorporates practice and feedback, contrary to the implications of analyses based on conventional efficacy metrics. We trace the failures of conventional metrics to violations of assumptions that our method avoids.
3 citations
TL;DR: This paper found that women tend to disproportionately respond "do not know" to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer, and about one-third of the financial literacy gender gap can be explained by women's lower confidence levels.
Abstract: Women are less financially literate than men. It is unclear whether this gap reflects a lack of knowledge or, rather, a lack of confidence. Our survey experiment shows that women tend to disproportionately respond “do not know” to questions measuring financial knowledge, but when this response option is unavailable, they often choose the correct answer. We estimate a latent class model and predict the probability that respondents truly know the correct answers. We find that about one-third of the financial literacy gender gap can be explained by women’s lower confidence levels. Both financial knowledge and confidence explain stock market participation.
3 citations