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Can Financial Literacy Reduce Anxiety about Life in Old Age?

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  • KADOYA Yoshihiko
  • Mostafa Saidur Rahim KHAN

Abstract

This study examines whether financial literacy can reduce anxiety about life in old age. We hypothesize that financially literate people are better equipped to make saving decisions, plan for the future, and handle uncertainty, reducing their anxiety about life in old age. The study uses data from a nationwide survey in Japan and probit regression analysis to provide evidence that financial literacy can reduce anxiety about life in old age. The regression coefficients show that financial literacy has a significantly negative impact on the level of anxiety, a relationship that holds after controlling for age, gender, education, marital status, assets, expected social security coverage, house ownership, living with children, and exercise. The results are robust after using different methods to measure financial literacy, and have implications for policies related to aging and risk management. Since financial literacy helps people to reduce risks and uncertainties effectively, policymakers should consider emphasizing financial literacy education early in life to lower anxieties about life in old age.

Suggested Citation

  • KADOYA Yoshihiko & Mostafa Saidur Rahim KHAN, 2016. "Can Financial Literacy Reduce Anxiety about Life in Old Age?," Discussion papers 16076, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:16076
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    Cited by:

    1. Mostafa Saidur Rahim Khan & Pongpat Putthinun & Somtip Watanapongvanich & Pattaphol Yuktadatta & Md. Azad Uddin & Yoshihiko Kadoya, 2021. "Do Financial Literacy and Financial Education Influence Smoking Behavior in the United States?," IJERPH, MDPI, vol. 18(5), pages 1-18, March.
    2. Shunsuke Ono & Pattaphol Yuktadatta & Takafumi Taniguchi & Tomoe Iitsuka & Masafumi Noguchi & Sawa Tanaka & Haruka Ito & Kousei Nakamura & Nanako Yasuhara & Chihiro Miyawaki & Katsumi Mikura & Mostafa, 2021. "Financial Literacy and Exercise Behavior: Evidence from Japan," Sustainability, MDPI, vol. 13(8), pages 1-15, April.
    3. Kuti, Mónika & Schepp, Zoltán, 2020. "Aging Society and Attitude to Risk," Public Finance Quarterly, Corvinus University of Budapest, vol. 65(4), pages 457-471.
    4. Gilles E. Gignac & Elizabeth Ooi, 2022. "Measurement error in research on financial literacy: How much error is there and how does it influence effect size estimates?," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 938-956, June.
    5. Mostafa Saidur Rahim Khan & Pattaphol Yuktadatta & Yoshihiko Kadoya, 2022. "Who Became Lonely during the COVID-19 Pandemic? An Investigation of the Socioeconomic Aspects of Loneliness in Japan," IJERPH, MDPI, vol. 19(10), pages 1-18, May.
    6. Sekita, Shizuka & Kakkar, Vikas & Ogaki, Masao, 2022. "Wealth, Financial Literacy and Behavioral Biases in Japan: the Effects of Various Types of Financial Literacy," Journal of the Japanese and International Economies, Elsevier, vol. 64(C).
    7. Mostafa Saidur Rahim Khan & Naheed Rabbani & Yoshihiko Kadoya, 2021. "Can Financial Literacy Explain Lack of Investment in Risky Assets in Japan?," Sustainability, MDPI, vol. 13(22), pages 1-12, November.
    8. Mostafa Saidur Rahim Khan & Trinh Xuan Thi Nguyen & Sumeet Lal & Somtip Watanapongvanich & Yoshihiko Kadoya, 2022. "Hesitancy towards the Third Dose of COVID-19 Vaccine among the Younger Generation in Japan," IJERPH, MDPI, vol. 19(12), pages 1-13, June.
    9. Kadoya, Yoshihiko & Khan, Mostafa Saidur Rahim, 2020. "What determines financial literacy in Japan?," Journal of Pension Economics and Finance, Cambridge University Press, vol. 19(3), pages 353-371, July.
    10. Yoshihiko Kadoya & Naheed Rabbani & Mostafa Saidur Rahim Khan, 2022. "Insurance literacy among older people in Japan: The role of socio‐economic status," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 788-805, June.
    11. Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2021. "Loneliness during the COVID-19 Pandemic: A Comparison between Older and Younger People," IJERPH, MDPI, vol. 18(15), pages 1-15, July.
    12. 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.
    13. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Tomomi Yamane, 2020. "Government’s Stimulus Program to Boost Consumer Spending: A Case of Discount Shopping Coupon Scheme in Japan," Sustainability, MDPI, vol. 12(9), pages 1-12, May.
    14. Morshadul Hasan & Thuhid Noor & Jiechao Gao & Muhammad Usman & Mohammad Zoynul Abedin, 2023. "Rural Consumers’ Financial Literacy and Access to FinTech Services," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 780-804, June.
    15. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan & Tomomi Hamada & Alvaro Dominguez, 2018. "Financial literacy and anxiety about life in old age: evidence from the USA," Review of Economics of the Household, Springer, vol. 16(3), pages 859-878, September.
    16. Hiroshi Fujiki, 2019. "Who needs guidance from a financial adviser? Evidence from Japan," Working Papers on Central Bank Communication 011, University of Tokyo, Graduate School of Economics.
    17. Yoshihiko Kadoya & Mostafa Saidur Rahim Khan, 2020. "Financial Literacy in Japan: New Evidence Using Financial Knowledge, Behavior, and Attitude," Sustainability, MDPI, vol. 12(9), pages 1-15, May.
    18. Hiroshi Fujiki, 2020. "Empirical Analysis on Understanding of Financial Products," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(7), pages 1-25, October.
    19. Edouard Ribes, 2022. "What are the financial implications of an ageing population for European citizens?," Working Papers hal-03118783, HAL.
    20. Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2023. "Who Became Victims of Financial Frauds during the COVID-19 Pandemic in Japan?," Sustainability, MDPI, vol. 15(4), pages 1-17, February.
    21. Pongpat Putthinun & Somtip Watanapongvanich & Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2021. "Financial Literacy and Alcohol Drinking Behavior: Evidence from Japan," Sustainability, MDPI, vol. 13(16), pages 1-13, August.
    22. Vitor Leone & Piers Thompson, 2024. "Financial literacy and advice perceptions among UK higher education students: an ethnicity tale?," Review of Economics of the Household, Springer, vol. 22(2), pages 709-781, June.
    23. Fujiki, Hiroshi, 2020. "Cash demand and financial literacy: A case study using Japanese survey data," Japan and the World Economy, Elsevier, vol. 54(C).
    24. Trinh Xuan Thi Nguyen & Sumeet Lal & Sulemana Abdul-Salam & Mostafa Saidur Rahim Khan & Yoshihiko Kadoya, 2022. "Financial Literacy, Financial Education, and Cancer Screening Behavior: Evidence from Japan," IJERPH, MDPI, vol. 19(8), pages 1-17, April.

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