Fed/GFLEC Financial Literacy Seminar Series

April 4, 2019

3:30 PM - 5:00 PM

Seminar III | Trust, Financial Literacy, and Financial Market Participation

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Jason Seligman

Senior Economist, Investment Company Institute


George Washington University School of Business
Duquès Hall, Minerva Room (451)
2201 G Street NW
(main entrance is on 22nd Street between G and H Streets)

Bio: Jason Seligman

Jason Seligman is a senior economist for retirement and investor research at ICI. He works on investor behavior and retirement policy issues. Before joining ICI in 2017, Seligman served in the federal government as an economist for the US Treasury Office of Economic Policy and at the President’s Council of Economic Advisers. Before his most recent work at Treasury, Seligman was a faculty member at The Ohio State University and University of Georgia. Seligman holds a PhD in economics from the University of California, Berkeley, and a BA in economics from the University of California, Santa Cruz.


We consider the roles of trust and financial literacy in engaging with financial markets – both the number of ways in which people engage and their individual preferences for how to engage. We find that both trust and financial literacy are strongly related to financial market participation but that the two channels work differently. Trust is more uniformly related to increases in financial market participation, with only the rate of increase changing over the scale. In contrast and in line with the old saw “a little knowledge can be a dangerous thing,” we find that increases in financial literacy from low-to-mid levels are associated with an initial decline in financial market participation but that subsequently an increasingly positive relationship emerges. Our findings suggest that trust and financial literacy play different roles, but each is related to investment behaviors in important ways.