Financial literacy and retirement planning in Germany

Bucher-Koenen, Tabea ; Lusardi, Annamaria

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URL:	https://madoc.bib.uni-mannheim.de/3147
Additional URL:	http://mea.mpisoc.mpg.de/uploads/user_mea_discussi...
URN:	urn:nbn:de:bsz:180-madoc-31472
Document Type:	Working paper
Year of publication:	2011
The title of a journal, publication series:	MEA Discussion Papers
Volume:	239-2011
Place of publication:	Mannheim
Publication language:	English
Institution:	Außerfakultäre Einrichtungen > Graduate School of Economic and Social Sciences - CDSE (Economics) Außerfakultäre Einrichtungen > VWL insb Makroök u Wirtschaftspol (Börsch-Supan 1989-2011)
MADOC publication series:	Veröffentlichungen des MEA (Mannheim Research Institute For the Economics of Aging) > MEA Discussion Papers
Subject:	330 Economics
Classification:	JEL: D91 ,
Subject headings (SWD):	Deutschland <Östliche Länder> , Private Altersversorgung , Sparen
Keywords (English):	financial sophistication , retirement planning , life-cycle savings , financial education , East Germany
Abstract:	We examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have little financial literacy compared to their West German counterparts. Interestingly, there is no gender disparity in financial knowledge in the East. In order to investigate the nexus of causality between financial literacy and retirement planning we develop an IV strategy by making use of regional variation in the financial knowledge of peers. We find a positive impact of financial knowledge on retirement planning.
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