Financial literacy and retirement preparation in China

Geng Niu (), Yang Zhou and Hongwu Gan

Pacific-Basin Finance Journal, 2020, vol. 59, issue C

Abstract: A growing body of literature, which primarily focuses on the developed world, investigates the implications of financial literacy (or lack thereof) on households' well-being. This paper examines the level of financial literacy and its impact on retirement preparation in China, a country that is growing old before getting rich. Drawing on internationally comparable survey questions, we find that a large proportion of Chinese people, especially the elderly, women, and under-educated, lack financial knowledge. The empirical results show that financial literacy has a strong and positive impact on various aspects of retirement preparation among Chinese people, including determining retirement financial needs, making long-term financial plans, and purchasing private pension insurance. Our findings suggest that concrete measures are needed to improve financial literacy so as to increase the awareness of retirement preparation in China.

Keywords: Financial sophistication; Retirement planning; Financial planning; Private pension (search for similar items in EconPapers)
JEL-codes: D14 D91 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:59:y:2020:i:c:s0927538x18306358

DOI: 10.1016/j.pacfin.2020.101262

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