Millennials and Financial Literacy: A Global Perspective
Annamaria Lusardi and Noemi Oggero
Global Thinking Foundation | May 2017
Summary: Financial literacy is of utmost importance for Millennials, as they face financial decisions that can have consequences for the rest of their life. However, in a rapidly changing economic landscape, Millennials do not seem to be prepared to deal with the financial challenges they will encounter, as they lack the knowledge needed to make savvy decisions…
The Gender Gap in Financial Literacy: A Global Perspective
Andrea Hasler and Annamaria Lusardi
Global Thinking Foundation | July 2017
Summary: With data on financial literacy from a survey of more than 150,000 people in 140 economies worldwide, the 2014 Standard & Poor’s Ratings Services Global Financial Literacy Survey (S&P Global FinLit Survey) represents the most comprehensive global measure of financial literacy to date. Using this survey, which we have helped design, we provide the first analysis of the gender gap in financial literacy from a global perspective…
Financial Capability of American Adults: Insights from the American Life Panel
Marco Angrisani, Arie Kapteyn, and Annamaria Lusardi
FINRA Investor Education Foundation | January 2017
Summary:While providing a wide range of financial capability indicators, the National Financial Capability Study (NFCS) lacks information about important determinants of financial outcomes, such as individuals’ health and cognition, and does not offer a precise, quantitative assessment of critical variables, such as household income, the value of financial and real estate assets and the level of debt exposure. In 2012, the FINRA Investor Education Foundation funded the administration of the NFCS survey to a representative sample of 2,000 individuals selected from within the RAND American Life Panel (ALP), an online panel providing detailed information on American’s personal finances not available in the NFCS. This allowed us to obtain a richer set of socioeconomic variables for each respondent and, therefore, to more comprehensively document financial capability across U.S. households and its heterogeneity. This Brief describes the insights afforded by this unique data set. The NFCS assesses financial capability by looking at four key components: making ends meet, planning ahead, managing financial products and financial knowledge. We examine each of these components exploiting the wealth of household- and individual-level information available in the ALP.
Entrepreneurship among Baby Boomers: Recent evidence from the Health and Retirement Study
Annamaria Lusardi, Dimitris Christelis, Carlo de Bassa Scheresberg
Ewing Marion Kauffman Foundation | November 2016
Summary: The evolution of entrepreneurship among Baby Boomers (i.e., those born between 1946 and 1964) is an important topic in economic research and public policy, as Boomers have proven to be prolific entrepreneurs. More generally, self-employment among older individuals is becoming more prevalent and economically relevant because it provides flexibility not found in salaried jobs, as well as a more gradual path toward retirement or continued work later in life. Our analysis aims to highlight factors that affect Boomers’ entrepreneurship to help policy makers and other organizations who work with entrepreneurs promote better and more informed policies.
STUDENT LOAN DEBT IN THE US: AN ANALYSIS OF THE 2015 NFCS DATA
Annamaria Lusardi, Carlo de Bassa Scheresburg, Noemi Oggero
FINRA Investor Education Foundation | November 2016
Summary: According to the study, 54 percent of student loan holders did not try to figure out what their monthly payments would be before taking out loans. And 53 percent said that if they could go back and redo the process of taking out loans, they would do things differently. The center used data from the FINRA Investor Education Foundation’s 2015 National Financial Capability Study (NFCS), one of the largest and most comprehensive assessments of financial capability in the country. In the 2015 wave, the study included key questions on student loan debt and its implications for the borrowers and for the economy as a whole. The study finds that Americans are clearly struggling with their student loan debt. Strikingly, we find that some 37 percent of respondents with payments due reported having been late with a student loan payment at least once in the last 12 months.
Testimony of Annamaria Lusardi Before the ERISA Advisory Council
U.S. Department of Labor | May 28, 2015
Summary: The transfer of risk from defined benefit plan sponsors to plan participants when offering lump sum distributions of pensions was the topic of Annamaria Lusardi’s testimony. In her testimony, she discussed the information that participants need to make informed decisions in pension risk-transfer transactions.
Hispanic Personal Finances: Financial Literacy and Decisionmaking Among College-Educated Hispanics
Carlo de Bassa Scheresberg, Annamaria Lusardi, and Paul Yakoboski
TIAA-CREF Institute | May 2015
Summary: This report examines the personal finances—assets, liabilities, planning behaviors, financial vulnerability and financial literacy—of college-educated Hispanics, i.e., those with high school degrees who report at least “some college” as their highest level of educational attainment. Many college-educated Hispanics are, in various ways, in a tenuous financial state characterized by financial fragility and broad use of expensive credit card behaviors or alternative financial services. Moreover, their financial literacy is consistently low, despite high confidence about their decision-making abilities. These low levels of financial literacy are associated with the other financial challenges faced by college-educated Hispanics that are outlined in this report.
Summary: Women today make up 47% of the workforce and contribute more to the U.S. economy than ever before. Yet compared to men, women still face steep financial challenges. Analysis by the TIAA-CREF Institute describes working women’s financial needs and capabilities by examining key aspects of their personal finances. The study also identifies how working women’s financial needs vary according to family status and career stage.
HELPING GEN Y ACHIEVE LONG-TERM FINANCIAL SECURITY
Carlo de Bassa Scheresberg and Annamaria Lusardi
TIAA-CREF Institute | February 2014
Summary: They are young, tech savvy, and confident; diverse, connected, and idealistic. And, they face a host of financial challenges. We’re talking, of course, about Gen Y, represented by the 2,124 college-educated respondents age 23 to 35 who took part in the 2012 National Financial Capability Study. To understand this group’s personal finances and financial-management practices, Annamaria Lusardi and Carlo de Bassa Scheresberg of the Global Financial Literacy Excellence Center, The George Washington University, and Paul Yakoboski, senior economist at the TIAA-CREF Institute, took a close look at the study’s data set. They found a generation confident in its financial prowess, but burdened by debt and engaged in potentially costly behavior.
FINRA Investor Education Foundation | September 2013
Summary: The economic crisis that began in 2007 started a wide-ranging spiral that not only weakened the U.S. economy but also eroded the financial stability of households—exposing the fragility of American families. Stock values dropped, real estate prices plummeted, household wealth shrank, unemployment rates shot up, and the tenuous positions of an alarming percentage of U.S. households became all too apparent. Even after the peak of the crisis, the recovery was very slow. This Brief describes how American families are positioned to confront economic shocks and the resources they may—or may not—have available to help them weather such crises.
Summary: Across the world, people are being asked to assume more responsibility for their financial well-being. Because of changes in the pension landscape, notably a shift from defined benefit to defined contribution type pensions, individuals must determine not only how much to save for retirement but also how to allocate that retirement wealth. This responsibility is paired with financial instruments that are increasingly complex. Rules and terms for credit cards, mortgages, lines of credit and other vehicles for borrowing have changed substantially, often providing more exposure to risk. This brief describes key findings about financial literacy in eight countries.
HOW EMPLOYERS CAN HELP NEW HIRES SAVE FOR RETIREMENT: BEST PRACTICES THAT BUILD LONG-TERM FINANCIAL SECURITY
FINRA Investor Education Foundation | September 2012
Summary: Not all employer-sponsored defined contribution retirement savings plans are created equal—some employer practices and plan designs are more successful than others in helping new hires accumulate a robust retirement nest egg. We reviewed numerous studies conducted by researchers affiliated with the Financial Literacy Center, and have identified ten powerful—and often relatively easy ways to increase financial literacy among newly hired employees, enhance their ability and willingness to participate in and contribute to retirement plan accounts, and improve their overall financial well-being. The guidance offered in this report is based on information derived from studies of real people in real situations and examination of how their behavior is affected by workplace policies and practices.