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Financial Literacy and Retirement Planning in Germany

Tabea Bucher-Koenen () and Annamaria Lusardi ()
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Tabea Bucher-Koenen: MEA, University of Mannheim

No 109, CeRP Working Papers from Center for Research on Pensions and Welfare Policies, Turin (Italy)

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.

Keywords: Financial sophistication; retirement planning; life-cycle savings; financial education; East Germany (search for similar items in EconPapers)
JEL-codes: D91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-eur and nep-lab
Date: 2011-03
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Related works:
Journal Article: Financial literacy and retirement planning in Germany (2011) Downloads
Working Paper: Financial literacy and retirement planning in Germany (2011) Downloads
Working Paper: Financial Literacy and Retirement Planning in Germany (2011) Downloads
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