Financial Literacy Confidence and Retirement Planning: Evidence from China

Bingzheng Chen and Ze Chen ()
Additional contact information
Bingzheng Chen: Department of Finance, School of Economic and Management, Tsinghua University, Beijing 100084, China
Ze Chen: China Insurance Institute, Department of Insurance, School of Finance, Renmin University of China, Beijing 100872, China

Risks, 2023, vol. 11, issue 2, 1-14

Abstract: Though ample empirical evidence demonstrates the relationship between objective financial literacy and retirement planning, we have a limited understanding of the role of individuals’ subjective financial literacy in their retirement planning. In this study, we examine how individuals’ financial literacy confidence bias affects their retirement planning behaviors using survey data in China. Based on the difference between respondents’ subjective and objective financial literacy from survey data, we construct measures of individuals’ financial literacy overconfidence and underconfidence for empirical analysis. Our results document the critical role of individuals’ assessment of financial literacy in their retirement planning. We find that individuals’ financial literacy overconfidence (underconfidence) significantly promotes (demotes) their retirement planning behaviors.

Keywords: financial literacy; overconfidence; underconfidence; retirement planning (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-9091/11/2/46/pdf (application/pdf)
https://www.mdpi.com/2227-9091/11/2/46/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:11:y:2023:i:2:p:46-:d:1069455

Access Statistics for this article

Risks is currently edited by Mr. Claude Zhang

More articles in Risks from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().