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Different Effects of Financial Literacy and Financial Education in Germany

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  • Pahnke, Luise
  • Honekamp, Ivonne

Abstract

Financial literacy or “what consumers know about finance” has become part of the scientific discussion in recent years. In Germany, as in many other countries, the structure of social security benefits has changed substantially. Using the German SAVE study conducted by the Mannheim Institute for the Economics of Aging, in this paper financial literacy in Germany is measured and its effect on private retirement provisions is examined. Therefore, the SAVE data is empirically analysed whether financial literacy has an impact on the retirement savings decision in Germany. With our analysis we were able to prove that financial literacy encourages individual retirement planning for households with an above-average income.

Suggested Citation

  • Pahnke, Luise & Honekamp, Ivonne, 2010. "Different Effects of Financial Literacy and Financial Education in Germany," MPRA Paper 22900, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:22900
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    References listed on IDEAS

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    1. Daniel Schunk, 2006. "The German SAVE Survey: Documentation and Methodology," MEA discussion paper series 06109, Munich Center for the Economics of Aging (MEA) at the Max Planck Institute for Social Law and Social Policy.
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    Cited by:

    1. Xu, Lisa & Zia, Bilal, 2012. "Financial literacy around the world : an overview of the evidence with practical suggestions for the way forward," Policy Research Working Paper Series 6107, The World Bank.

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    More about this item

    Keywords

    Financial literacy; Retirement savings; Private pensions; Germany; SAVE;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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