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A Laboratory Study of the Effect of Financial Literacy Training on Retirement Savings

Author

Listed:
  • Dina Tasneem
  • Audrey Azerot
  • Marine de Montaignac
  • Jim Engle-Warnick

Abstract

We report results from an economics experiment that examines the role of financial literacy in retirement savings. In the experiments, participants make decisions in a retirement savings game, in which income during working years is uncertain. Participants are nudged to varying degrees with automatic savings in each period of the game. Some participants receive financial literacy training in the form of training to compute the expected savings needed at retirement to smooth consumption over the entire life cycle. We find evidence that literacy increases savings and improves efficiency. Our finding has implications for choice architecture for retirement savings.

Suggested Citation

  • Dina Tasneem & Audrey Azerot & Marine de Montaignac & Jim Engle-Warnick, 2018. "A Laboratory Study of the Effect of Financial Literacy Training on Retirement Savings," CIRANO Working Papers 2018s-24, CIRANO.
    • Handle: RePEc:cir:cirwor:2018s-24
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    References listed on IDEAS

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    More about this item

    Keywords

    Precautionary Savings; Retirement Savings; Life-cycle Model; Dynamic Optimization; Nudge; Financial Literacy; Decision Heuristics;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General

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    This paper has been announced in the following NEP Reports:

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