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Financial literacy of middle-aged and older Individuals: Comparison of Japan and the United States

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  • Shimizutani, Satoshi
  • Yamada, Hiroyuki

Abstract

Financial literacy holds growing interest for managing assets/savings during the longer retirement period currently experienced in rapidly aging countries. We examine and compare levels and determinants of financial literacy as well as its association with asset allocation among middle-aged and older individuals of Japan and the United States. We present some interesting findings. First, financial literacy is generally influenced by educational attainment, cognitive skills, coursework in economics or finance, and income level. Second, financial literacy is associated with household asset allocation; individuals with higher literacy also have investment in stocks or securities. These patterns are commonly observed both in Japan and the United States.

Suggested Citation

  • Shimizutani, Satoshi & Yamada, Hiroyuki, 2020. "Financial literacy of middle-aged and older Individuals: Comparison of Japan and the United States," The Journal of the Economics of Ageing, Elsevier, vol. 16(C).
    • Handle: RePEc:eee:joecag:v:16:y:2020:i:c:s2212828x1930101x
    DOI: 10.1016/j.jeoa.2019.100214
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    References listed on IDEAS

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    1. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    2. Sekita, Shizuka, 2011. "Financial literacy and retirement planning in Japan," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 637-656, October.
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    Cited by:

    1. Hiroko Araki & Juan Nelson Martinez Dahbura, 2021. "The Heterogeneous Relationship Between Financial Education and Investment Behavior in Japan," Keio-IES Discussion Paper Series 2021-018, Institute for Economics Studies, Keio University.
    2. Francisco J. Oliver-Márquez & Almudena Guarnido-Rueda & Ignacio Amate-Fortes & Diego Martínez-Navarro, 2024. "Regional Comparative Analysis on the Determinants of the Spaniards’ Financial Knowledge," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4203-4238, March.
    3. Khurram Rehman & Md Aslam Mia, 2024. "Determinants of financial literacy: a systematic review and future research directions," Future Business Journal, Springer, vol. 10(1), pages 1-25, December.

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    More about this item

    Keywords

    Financial literacy; Japan; U.S.; JSTAR; HRS; Household asset allocation;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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